S&P 500 Does One Day Reversal

The S&P 500 made a significant one day reversal today, and may be signaling the short-term correction we have been waiting for. Still, I don't expect the correction to fall too deep with the worst case scenario at 975 (~10% correction). I reiterate my view that we already bottomed in March and believe that a consolidation in time will make up for a huge correction (20% to 30%) that most pundits are calling for. Expect support levels at 1,037 initially, then 1,005. I still recommend a range trading strategy.






Oil also fell and the US dollar rallied, consistent with my prediction in "Oil and Dollar: A Harbinger of Things To Come?". To reiterate, oil is in a distribution pattern and may test the $62.50 and $60 per barrel levels. Looks like the relationships between oil, dollar and stocks are still being sustained. Gold was down and bonds were up, so clearly, inflation is not a concern as of the moment. Bonds however are forming what seems like a bearish rising wedge... possibility of inflation coming into play eventually as the economy recovers?