I've read a lot of commentary calling for a 10-20% correction. While I think it's not out of the question for something like this to happen, I am not selling anything today. Dow theory at this point is not signalling any major correction on the daily reading. Widening the view to a weekly reading, the case for a continued bull market remains rock solid.
For the bull to be brought into question, the transportation average will need to make new highs not confirmed by the industrials, thus signaling cracks in the demand side of the economy. As the transportation companies make deliveries, we need the industrials to confirm continued production. If not, then the transportation companies won't have anything to deliver.
So, I think we have at least one more quarter of higher stock prices before any significant correction befalls the markets.
