Turnaround Tuesday indeed! In all seriousness, if you have followed the market over the last few months, big percentage gains such as we saw today have become the norm. Remember that most huge, rip-your-face-off rallies do in fact occur in bear markets. So the bottom line is, don’t get too excited.

Right now, the DJIA is still the laggard. It had a price increase of only 3.32%. Worse yet, it is still stuck below the November low. The DJIA needs to get above resistance at 7550. Considering today’s price action, it could happen as early as Wednesday. If it fails to break 7550, expect more pain.

The S&P 500’s movement today was more promising. The index got back above the November low. There is resistance right above at 780. The 800 area will be an even tougher test for the S&P 500.

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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