Best Financial Markets Analysis Article All things considered, the beating stocks took yesterday was quite expected. It seemed clear that support was going to be breached on the indexes. As shown on the charts below, there is one last line of defense for the Dow Jones Industrial and the S&P 500 before reaching the lows. Notice also, that volume has been picking up over the last several days. That is not a good sign for the bulls.

The general market consensus is that the next support will not hold and the November low will be retested. One thing you should keep in mind is that market analysts all have a different view of a “retest of the bottom.” Some may say that if 8200 on the Dow holds that “the bottom was successfully retested.” They would have a valid point. Not every market bottom retest actually requires a “touch” of the previous low. Sometimes, it comes close, or even undercuts it. If you want to study market bottoms, here is a great site .

None of us can predict the future. The only thing we can do is see what the market has done in the past and make reasoned decisions. If we are incorrect in our market opinion, we need to correct the problem immediately. Being right in this market will get you in a lot of trouble.

By Kingsley Anderson

http://tradethebreakout.blogspot.com

Kingsley Anderson (pseudonym) is a long-time individual trader. When not analyzing stocks, he is an attorney at a large law firm. Prior to entering private practice, he served as a judge advocate in the U.S. Army for five years and continues to serve in the U.S. Army Reserves. Kingsley primarily relies on technical analysis to decipher the markets.
Kingsley's website is Trade The Breakout (http://tradethebreakout.blogspot.com)

© 2009 Copyright Kingsley Anderson - All Rights Reserved
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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