Emerging From Correction

      The action of the last 3 weeks is exactly what I was hoping for. That is, the market is slowly working its way up toward the June highs in a steady, "consolidating" manner. There will probably be a DJT non-confirmation which will result in a sell-off to relieve the overbought situation by sending the McClellan Oscillator back down towards the 0 area. Then a little sideways action will occur in the area of the short term decline lows. Then I would hope for more strong upside action up to the April 26 highs. Then, some corrective action should transpire which will create a head and shoulders or "saucer bottom" for the major averages. This latter action would be taking place in the late summer/early fall time zone which is a weak seasonal period.
    Then in the strong seasonal period I would hope for a powerful rally to take the market in the direction of its 2007 highs.  This rise might be the conclusion of the mini-bull, but it is going to be a challenge to correctly identify the final top, which could occur in the late spring or summer of 2011. Interestingly, the S and P 500 is also currently lagging the DJI while the A-D index has already soared well above its June high area. The McClellan Summation Index is showing a classic rising pattern out of the area of its recent lows. So this market is essentially being led primarily by the A-D index and secondarily by the DJI.
     The discussion on whether the market reacts to news or is always looking ahead to something else is an interesting one which I may write up on Unraveller's Spool in the future.