For What It's Worth

Improvement in near term indicators (Momentum and MACD*) strongly suggest that the overbought correction we are currently experiencing** will likely run its course shortly, the Greek tragedy notwithstanding. At that point, the rally to a new recovery high (closing above 1159 in the S&P 500) becomes the higher probability.

Should this unfold, the longer term deterioration in many other non US indices (developed and developing***) MUST reverse itself. If they do not AND the recovery highs in key US indices (S&P 500, 400, and 600) are NOT CONFIRMED by the other non US indices, you can then ring the bell as the 2Q10 correction (>10%) will most likely be the outcome.

*First chart
**Slow stochastics above 80 = overbought, below 20 oversold
***Second chart
Note: click images to enlarge