Correction

A term used in technical analysis. When a market moves strongly in one direction and then pulls back, it is referred to as a correction which commonly occurs in a bull (up) or bear (down) trend). It is often sharper (occurs more quickly) than the preceding move. Corrections are a component of an overriding trend up or down and not considered as a reversal of the trend. A correction usually strengthens the foundations of the trend to continue and sustain further gains (or losses) in the short term such as the days or weeks ahead.