The Game Plan

Stocks:

I’m going to start off with a few breadth charts.The NYSE new highs – new lows chart is now on a sell signal as both the slow andfast average have rolled over and are accelerating downward.

Everything continues to point to an impending correction. The change in character the last two days is also suggestive that something is different. Instead of openinglower and rising through the day, the market has been gapping up but

closing lower

. This is a complete about face from what has been happening over the lasttwo months. I will be monitoring sentiment as the market moves down into the correction. If investors get scared and panic quickly then this should be a short correction. If wewere to get a sharp selloff this is what I would expect to happen. I’m talking 50+S&P 500 points in 3 or 4 days.If, however, investors have gotten locked into a buy the dip mentality it could slowthe rate of decline and we might be looking at something lasting closer to 10 or more days.