-We have been trying to catch a falling knife instead of following what the market is telling us.  In this market, we need confirmation on directional moves and reversals.  The market is moving on the whims of whatever news event is relevant.  We are still due our bear market rally and it should have happened by now.  Technical analysis is always trumped by news and this is a news driven market.  We broke a critical level of support on Friday 2/20 at 7449 on the DOW.  We stayed below that level all week.  On any move back up, we must contend with that level before advancing higher as old support becomes new resistance.

The momentum continues to the downside, however, it is important to remember that support and resistance levels are never “exact” points on a chart, they are zones.  Let’s let the market tell us where it wants to go and then we can pick logical targets for the move.

-Stout support was broken at 741.  We need to see if the break is for real.  It must stay below and possibly retest that level as new resistance.  We are at support of 733 from April 1997.

-The NASDAQ has shown great strength in this bear market.  We have an inverted hammer at trendline support.  Let’s see if it holds.

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