Most folks like to look at the Dow Industrials and say the market is "down 10 points" or is "up big today." But seasoned investors watch the S&P 500 index. It's a wider gauge of the market. And as you can see from today's chart, this gauge is near a short-term "line in the sand."

From early March to mid-June, the S&P enjoyed a historic 42% bounce. This bounce took the S&P to a high of 946. But since that high, stocks have displayed "soggy" behavior. The market has given back a portion of that 42% gain... and is camped near an important chart level: the May low of 882.

The 882 area is where the last set of heavy "trench warfare" occurred between buyers and sellers. If sellers are able to push the S&P below this recent support level, more losses for stocks are likely to follow.

By Brian Hunt

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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