Those who have watched my work for a while know that I find channel analysis very useful. For me, it is no coincidence that Ford (F) hit the upper channel line at around 9.05 and then accelerated 1% above the upper line, which happens to be 9.14, after which the price structure reversed and declined back into the confines of the channel.

The low so far today is 8.81, but my sense from the pattern off of the October 30 low at 6.81 into today’s high at 9.14 is that a larger, deeper correction likely is in progress that will press F to 8.75-8.68 and possibly into the 8.40 area. I am on the sidelines, watching and waiting for another opportunity to re-establish a new long position.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.