Been lots of chatter about the mkt being “overbought” (whatever the heck that means) and needing a “correction” (ditto …).
Let us digress … overbought, correction … what do those terms mean?
“Overbought” … I guess that means the mkt is a bit too levered long, weak hands long, so vulnerable to a sell-off, that sort of thing. Yeah, I can accept that.
But … “correction” … this one has me flummoxed. You correct things that aren’t right, … err, right? Felons get sent to a correctional facility, right? So when a market moves and then it ‘corrects’, does it mean the initial move was somehow wrong? Like I said, flummoxed. Anyway, more for the pedants to discuss amongst themselves. Lets say the terms mean different things to different people and leave it be.
More importantly, and back to the non-navel-gazing world, the ES (March 12) has fallen from 1329-ish to 1296-ish … so 30-odd points. That enough of a “correction”? Its been above 1300 for about two weeks, moving sideways. That enough of a “correction in time”? (Don’t get me started on that one 🙂 )
News flow has tended to the negative side the past few days. Figures not quite as strong as expected. Europe news back to its bad old self. And the sentiment has swung 180 degrees – should have seen Twitter last night (you know, around the ES open, which is ‘last night’ for me) … the bears were at it big time. You’d have thought there had never been a rally. Ever. I exaggerate – but there was a marked and sudden increase in bear comments. Hmmmmmm.
OK, so the point of this post:
Is the 30-odd point fall enough of a correction? Is the two weeks sideways enough of a correction in time?