Odds favor a spike in stock prices this week if the Fed Chief Janet Yellen implies that interest rates won’t edge up until Q2 next year or later when she holds her press conference Wednesday at 2:30.
Nevertheless, the potential for a sharp correction in coming weeks increases as uncertainties mount here and abroad to keep buyers on the sidelines and prompt others to sell.
We have seen worse negatives in recent years, but not with the market at these levels. While this bull market can run much further, the market has not seen a correction greater than 10% in three years.
From what I read, there is no shortage on the Street of those who expect a correction, but I haven’t seen many who see one in excess of 10%, just the 3%-5% variety. But small corrections can become much bigger if new negatives hit the market at the point the small correction is poised for a rebound.
