Where do we go from here?

The much expected correction has finally arrived. Whether you have been diligent enough to prepare for this is a different discussion altogether. We at IGIR had expected to move up in a mellowed way but the things that happened in later march till late April were sort of crazy. Since things were up unexpectedly we were also caught on the wrong side with some positions but we did not liquidate the positions in an anticipation of a move.

Now this move has been more jerky that we had thought it to be. These situations are very tricky and dangerous. The question is where do we go from here....

Most of May will be down and consolidation begins in June. By Mid June we should have found a new ground and then we can move back up from there. The fundamentals of the economy are all OK and we do not think this is the end of the road here. This was technically the last leg in the first wave that started in March of 2009. The ground level of this turmoil will decide the pivot for the next wave.

We expect to hold 106 as was pointed in the old post but 1014 is really the key level longer term. If that is broken then that is really bearish. After that 948 is the next stop which is a 50% pullback from 1222. 883 would be the nullification of the previous wave and 675 would take us back to the original step. We do not expect to break 1014 however at IGIR we firmly believe that markets can usually prove you wrong when you think you can predict them. 

Like all customers, Mr. Market is always right and he usually wants to tell you something....Preparing to listen is for your own benefit rather than his.