IS THE CORRECTION DONE?

Its good to be back. We had a nice decline last week which has created some great possible bullish opportunities going into earning season. It looks like we might have completed a bullish ABC pattern in the SPY and DIA. Today's move was strong and should continue. The only thing that concerns me is that the total retracement is less than 38.2% from the March low to the June high. This does raise a possibility that we will have another move down before starting any significant trend upward. Today's move was strong enough to believe that we should continue to move up in the near future...but then we could possibly sell off again. This possible pattern is called a double zig zag or a complex correction. This ABC pattern we see could possibly be just a wave A. This means we could rally a bit to complete a wave B, then sell off in a wave C that could bring the retracement down to the .382 or maybe even the .50. This would work nicely into my longer term expectation. I think we could get a pop from the earnings coming out in the next few weeks which could be followed by a drop in August and maybe even September (or at least a more stagnant or sideways trend). We could then start the next significant trend going into the end of the year (October, November, and December). Watch the transportation stocks (or the Dow Jones Transportation Average) as an economic indicator. Moves in the transportation stocks can be a leading indicator for changes in the economy. I will watch trends in the railroad stocks, trucking stocks, airlines, and shipping companies (like FDX and UPS).