Stock Market -- Daily Chart

As is obvious, the market is in short term correction mode. I rate it as entering  moderately oversold in
the short run. The market has corrected nearly 7% from the 4/2/12 cyclical high and by conventional
standards stands as a "normal" cyclical bull market correction. So, it might get a second look down
around this 1325 level. SPX chart I happen to regard the 1325 level as important, because a sharp break below that level would close out this last bull leg running from Oct. '11 and would, on a prima facie
basis, signal the end to the cyclical advance that began in early, 2009 as we have had a three wave up - move since then.

Someone could come along and say "well, we we are going to get a fourth leg up" and that is a
possibility. Another person could come along and claim that a break down through 1325 only
signals the end of the first leg of a longer running advance which could go on for several years.
And that could be true.

But, for me, a sharp break below SPX 1325 would signal uncertainty and the need to do some
critical re-thinking about my assumptions. It would signal that something could well be going
haywire, something that needs to be tracked down and understood.

As an optimistic old guy, I am hoping we hold and bounce from this level and that further modest
progress might be in store. However, as much a virtue as hope may be, it is out of place in
this business......