Correction Definition

The market is considered in correction if four to seven distribution days happen within a month period. A distribution day is when one of the major indexes declines in higher volume from the previous day. When this happens you know institutions are selling more than buying. This in turn pulls the market into correction because institutions drive the stock prices up or down with their large buying capabilities.

Any of the major indexes can bring the general market into correction so watch them all and follow the distribution days. According to William O’Neil 3-out of-4 stocks follow the general market.