In our update last week we indicated that our proprietary short term investor sentiment indicator was close to signalling the potential for a modest market correction. As expected, that “sell signal” has just flashed. Although the stock market may continue higher for a short while, we are reasonably confident stock prices will pull back at least 3 to 5% in the near future. This gives us a clear sign post to minimize stock exposure at current prices and wait for the correction before committing any additional capital. Although a much larger decline cannot be ruled out, at this time we have no evidence to support a more serious correction.