The depth of the recent correction has been surprising, but it still seems quite clear that the recent downtrend has been only a correction and not the beginning of a bear market. Typically corrections are 10%-15% declines with the majority being just over 10%. Currently, most indices have fallen at least 10%. We are certainly at or near the area where rebounds generally occur.


The NASDAQ Composite has broken its 200 day moving average and another support line. The next support area is right below today's low. The subsequent support is at 2500. The volume has been quite large recently, suggesting that a reversal is just around the corner.

The S&P 500 is currently sitting on support and has additional support 10 points lower than today's close. It looks as if the index is in the process of forming a double bottom pattern.

We believe that the Russell 2000 is also carving out a double bottom formation. Today and yesterday's low coincided with the low from August. This index has declined nearly 15% from the top.

EEM broke our support line and is sitting at new support. A break of this line should push the ETF to 138.

IEV has not yet broken its 200 day moving average during the correction. Support is at today's low and the climbing moving average.

It feels as if the stock market makes three steps forward for every two steps back during the past few years. There has been very little volatility in the markets over the past years and gains are slow. As always, patience is most important during these rougher times.

Happy Thanksgiving from the Nasdaq Wizard Staff!