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Correction

   Also found in: Dictionary/thesaurus, Medical, Legal, Idioms, Encyclopedia, Wikipedia 0.01 sec.
Correction
Reverse movement, usually downward, in the price of an individual stock, bond, commodity, or index. If prices have been rising on the market as a whole, and then fall dramatically, this is known as a correction within an upward trend. Antithesis of a technical rally. See: Dip, break.

Market Correction
A drop in the price of a security when that security has been overbought and therefore overpriced. Market corrections are usually short-term and are necessary for the stability of the security.

correction
A sharp, relatively short price decline that temporarily interrupts a persistent upward trend in the market or in the price of a stock.

Correction. A correction is a drop -- usually a sudden and substantial one of 10% or more -- in the price of an individual stock, bond, commodity, index, or the market as a whole.

Market analysts anticipate market corrections when security prices are high in relation to company earnings and other indicators of economic health.

When a market correction is greater than 10% and the prices do not begin to recover relatively promptly, some analysts point to the correction as the beginning of a bear market.



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