The markets next turning point is the third week of January and a new panic volatility cycle starts the following week.

This means the recent countertrend bullish rally we have seen is typical. If we rally into the week of 01/21 and we do not achieve a Weekly closing above 25005 on the Dow, look out for more to the downside.

Click on the image for a maximized view.

Keep in mind that the major thrust in a correction is ALWAYS in the initial stage but we can still see a lower low. Historically, it is unlikely to be a major thrust down as occurred in December. Nonetheless, we must respect the fact that we could still make a new low completing a 3-6 month reaction from the October high.

There is still no indication that we are in a major bear market nor are we ready for a sustained bullish breakout to the upside just yet.

Market consolidation is still occurring.

The Charts in the coming weeks:

Look to the daily chart to give you an idea when direction is starting, then to the weekly charts to see if intermediate term move has started. When the Monthly confirms the Daily and Weekly signal, the move should be sustained in that direction.

Follow your signals for general market direction and entry points.