The Canadian Venture Index has been in a multi-month correction pattern from the 2465 highs 13 Fibonacci weeks ago to the current levels of 2058, with a low 2 weeks ago at 1957.

The index is important to watch because it represents the markets views of exploration and speculative stocks in general, as well as the markets possible longer term views of Gold, Silver, Copper, etc.  You’ll notice the Gold and Exploration stocks in general have been lagging the metals movements in the last several months.

The high to low correction was about 407 points, which is a near 38% retracement of the July 2010 lows (With the market) and February 2011 highs.

An 8 fibonacci month rally of over 1100 points on the Index.  Now followed by a current 13 Fibonacci week correction with a rough 38% fibonacci corrective low of the entire 8 month move up.

Sounds like crowd behavior to me

Now, looking at the chart you can see extreme oversold situations like we had in Spring 2009, and again in July 2010.  What we want to see near term is a strong rally up in this Index and the Junior stocks.  Otherwise, this index has the potential to roll over and run down to 1400 from 2050 levels.

Below is the chart, and we want to see this 3 wave correction hold at 1957 and not go lower. If it does,  a possible major sell signal will be confirmed.

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