We got some interesting technical readings today. As i had predicted the weakness of the markets came through today. But what do we have at the end of the day!? A lovely gravestone encompassed in a Harami. What can this gravestone be possibly saying? I believe we can refer to my comments made in the morning. This is a mixed day between good and bad earnings and not surprising economic reports and fundamentals. The long low tail is an indicator of the bears trying to force their way down, but could not win due to the fact that fundamentals are not bad as apparently perceived as more bulls came to return prices to opening levels. Though on a whole, volume is still indicating down, as volume is not at average levels, and the price being above 20 SMA which traditionally shows a formation of a cup pattern. These negative indicators give more weight to the harami in place which would lead me to say there is more room for falling with support around 1460 or 1470.
All this can be reflected within fundamentals, as credit problems and sup prime are still perceivably a systemic threat, sentiment is mixed, and people are on a wait and watch policy. As economic indicators are reported down, or as revisions come in, there will be 1 or 2 surprises to drive down prices before stronger reports cause a bounce of support levels.
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