The Dow – To Correct or Not?

QUESTION: Hello Martin,

last week i read on your blog about possible fall in Dow Jones, you said it’s possible that we could see biggest fall ever and that should start this September but today you sad you don’t expect major correction. I’m sure there are many readers on your blog who are confused about this topic same as i am so please if you can drop few lines about it for better understanding.

Thank you in advance.

M

ANSWER: No, I have said all along that this is by no means a reversal in trend – a correction yes, but one that does not breach the reversals. If we test the very bottom of the technical channel, we are really looking at perhaps an 8% correction at best.

What I have warned about is that Plan-B is a correction in currency terms outside of the dollar. This tends to produce a more shallow correction. We indeed have that correction in play since February.

There is absolutely NO WAY we are looking at some drastic correction that ends the bull-run. To do that, capital has to flee to government bonds, which does not appear to be likely. We will lay out the extreme points on the Private Blog.