Best Financial Markets Analysis Article After over six weeks of declining markets, models are now suggesting that the correction is over. The retracement of the broad-based NYSE Composite has moved model levels down to where major reversal occur (Chart 1). Market action today strongly indicates the completion of the pullback.

The index continues to trade on an average 16-week cycle (Chart 2). This has been the pattern for the past 5 years. The last four significant troughs have been in March, July and November 2009 and February and finally late May 2010. The next low is expected in September.

The next four months should be approached with increased caution. Though the probability of positive markets for June, July and August are only 50%, the likelihood of September turning negative is over 73%.

Additional information about the current market conditions plus a more detailed outlook to the September low will be in the upcoming June newsletter.

Your comments are always welcomed.

By Donald W. Dony, FCSI, MFTA
www.technicalspeculator.com

COPYRIGHT © 2010 Donald W. Dony
Donald W. Dony, FCSI, MFTA has been in the investment profession for over 20 years, first as a stock broker in the mid 1980's and then as the principal of D. W. Dony and Associates Inc., a financial consulting firm to present. He is the editor and publisher of the Technical Speculator, a monthly international investment newsletter, which specializes in major world equity markets, currencies, bonds and interest rates as well as the precious metals markets.

Donald is also an instructor for the Canadian Securities Institute (CSI). He is often called upon to design technical analysis training programs and to provide teaching to industry professionals on technical analysis at many of Canada's leading brokerage firms. He is a respected specialist in the area of intermarket and cycle analysis and a frequent speaker at investment conferences.

Mr. Dony is a member of the Canadian Society of Technical Analysts (CSTA) and the International Federation of Technical Analysts (IFTA).

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