We have missed the September and October 2010 corrections. With the Fed still monetizing debt right up to the release of their next round of qualitative easing at $600billion. But we may not going to get a Wiemar inflation driven stock run yet (precursor was stocks in 2009, that rallied nice and smooth of the back of a lot of liquidity) while we have internal disputes within the Federal Reserve over the $600billion US government debt purchase, PIIGS CDS/BOND spreads widen as the ECB throws a lifeline to the Irish and Spanish/Portuguese debt markets till market auctions in 2011 and there's China's property bubble still in the background.
Does all this add up to a market correction into the final months of 2010?
Absolutely, the Dow is extremely overbought running above the 50ma, 100ma and 200ma. With it's major support being the cross of the 50MA and 200MA, or between 10300 and 10400. A slight attempt at a correction was on September 29th low @10798 and October 4th low @10711
A flash crash could send the index below 10000, but for that we need a major event. Probably one on the cards with systems/humans edgy on any sign that inflation/deflation driven collapses could lead to a major sell .
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