Make no mistake about it, this is still a bear market. It has been quite some time since the market has experienced such a violent decline. Any dreams about the rally continuing were violently doused as the market did not appreciate the comments of Mr. Geithner.

Of course there were other psychological factors in play. Traders still do not have enough confidence to push the indexes over their respective 50 day moving averages. As has been the case recently, the DJIA is bringing up the rear. While it currently sits at support, it has again fallen below the 61.8% Fibonacci retracement at 8120. It would be ideal if the DJIA could get above this level, otherwise, the low comes into play.

The S&P 500 has fared a little better than the DJIA. For one, the trend is still intact. If that is breached, there is support in the 800 area.

Surprisingly, the VIX did not rise higher on today's carnage. While it did jump almost 7%, it backed off, ironically, after touching its 50 dma. Aside from the aforementioned moving average, the VIX likely faces resistance in the 50 area.

The bear certainly showed its claws today. Now is not the time to be a hero. Bottom fishing is certainly not advised at this time. Remember, if you lose money, you have no one to blame but yourself.

Positions: None

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)

Copyright © 2009 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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