Prepare for a mild correction..

Today the JCI closed down 1.7% from the previous day. I believe this is the start of a mild correction. The correction that we would have in the next one or two months would be more significant than the one that we have when the index reached 1470 level.

The rally that we had in the last 3o days was similar with the one that we had in last December and early January. Both rallies were able to reach a new high. The rally that we have in last December was followed with a correction in the next two months and reached its lowest in March. I believe the rally that we have currently would be similar with the December rally and I would expect the JCI to go down further to around 1300 level.

While there is still no evidence about the economic recovery in the USA, I would predict that the JCI would not be able to continue its rally this month. The World Bank also has cut its forecast for Indonesian growth to 3,4% that washed away investors confidence. If you look at the stochastic indicator, you would be able to find that obviously this is not the right time to buy.
When the index has reached around 1300 because of the correction, I believe that would be an ideal time to start accumulating again..