Where is the bottom??

Support and Resistance Chart


Here is an interesting chart of the support and resistance, short term, drawn in a somewhat longer term chart - the current trend being sideways since October 10. While one could characterize the intermediate trend of 3 months or so as the market as being in a down trend, the short term (4-5 weeks max) is definitely sideways but in an unusually wide range of volatility. We go back and forth, back and forth, but those moves have defined a range bounded by a top at 9750 and a bottom at 8100. These are the critical support 8100 and resistance 9750.

The new administration seems ready to assume the reins of leadership immediately and the meeting with the financial brains did not seem to inject much optimism into the confidence mix in the market sufficient. We need to break upwards out of this resistance zone. Since the meeting of the gurus did nothing to change the current very negative perception. If there is no move above 9750 - a move that stays in place for a few days, then market's reaction has to be counted as decidedly negative and we could expect a potential break down below the current support of 8100 on the DOW. I have mentioned before , maybe more than once, that if we are firmly below that 8100 level, then there isn't much to hold the market up - you have to go back a decade to find any support. Could be a cold winter.

So many people who have only modest savings had counted on the stock market for their retirement. Now I don't think that will be available to them. It is just too long a time to recover these losses. Sphere: Related Content