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The mini-correction too was much tamer, the Dow completing a healthy pullback of just 6.25% (half the 12.5% correction experienced by the FTSE 100). The US economy remains at the forefront of economic recovery, and US shares appear well placed to benefit from a far more pragmatic US central bank. My long recommendation remains intact.
The Dow has now completed a rise of 6.25% from its recent intraday low. A little hesitation could therefore be expected in the next few days, but should be largely ignored as irrelevant. The major target band (defined as 16,023-16,186) remains a compelling objective, even if it doesn't trade there in a straight line. We should not allow ourselves to develop a gung-ho attitude however, and must remember that the 690 points required to achieve the target of 16,175 equates to a mere 4.5% rise.
In an interesting similarity between the Dow and Germany's DAX index, a push to fulfil my targets would complete a rise of 150% (from the major lows of March 2009) on both of these indices. The last four years have certainly offered phenomenal opportunities to invest.
Recommendation: Stay long. Target 16,175. Stop-losses can remain unchanged and activated only on momentum below 14,390.