Tuesday, December 2, 2008
There are two important technical events right now.
1.) The market is in a clear downward sloping channel. So long as prices remain in that channel the market will be somewhat "predictable". However, notice there is roughly a 20 point range for prices to move in. That means we can have 15% - 20% moves and still be within the channel. So high volatility is still a possibility.
2.) I drew two horizontal lines to show key support areas from previously established lows. So long as these are maintained the technical outlook is fair.
However, there are still plenty of technical problems.
-- All the SMAs are moving lower
-- The shorter SMAs are below the longer SMAs
-- Prices are below the 200 day SMA
-- Prices are near the lower SMAs