Notice the following:
Prices fell through three important areas of technical support today.
-- The first was the 50 day SMA
-- The second was the upward sloping trend line that started in mid-July (I should add this is a weak upward sloping trend line. I think the real line was the first one that prices violated in mid-August. But an argument could be made the second line was also a trend line).
-- The third was the lower line of the triangle consolidation pattern. The market has been trading between (roughly) 127 and 130 for the last month or so.
-- Notice the higher volume on today's action
-- Note the extremely strong downward sloping bar.
Today did a lot of technical damage. Let's take a look at the longer picture
The market is clearly in a down/up/down pattern. The market is also making a series of lower lows and lower highs. Also remember from above that today the market's broke a lot of technical support.
Short version: the possibility of going lower is very high.
4 comments:
I like your short version,
High probability of going lower. I think there's longer term support on the DOW at 10,500.
I don't know if the market will go that low, but I'm keeping that number out there as a possibility.
It is amazing to me that Clinton left office with the Dow at 11700+ - here we are, near the end of Bush's two terms, there is a real possibility that eight years later - YES EIGHT YEARS LATER!!! - the Dow will be at no better a level.
It could have something to do we the majority Republican Congress that Clinton had to work with. The "Contract With America" curbed spending and helped the economy.
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The Republican's helped the economy under Clinton? Uh, yeah, that would be virtually the same Republican majority Congress that helped Bush spend like a drunken sailor for his first 6 years. Besides, government spending (if done correctly) should stimulate the economy. The "Contract ON America" had nothing to do with the Clinton economy. But the "Regan Revolution" has destroyed our middle class.
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