Technical Analysis: It's Really Bad Out There!
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Just when we thought things couldn't get any worse, along comes Newsweek to tell us it's even worse than we think.
That kind of bearish sentiment in the mainstream press suggests that the bad news may be largely priced in at this point, and we've had a number of bearish magazine covers suggesting that in recent months. That's a long-term positive for stocks, but doesn't rule out more choppiness as we noted more than a month ago.
The Dow (first chart below) offers the best support near here, at 11,960, and a move just below 12,000 might just ratchet up fear high enough for a bottom.
The S&P (second chart) also has important support near here, at 1324. To the upside, 1370 is a very important first hurdle.
The Nasdaq (third chart) has support at 2387-2392 and 2350, and 2425-2434 is important first resistance.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.