Wednesday, January 23, 2008

Market Finds Support?

What a wild day for the markets today. Is it possible this was the capitulation trading day; thus, establishing the point at which the market charts a new trend higher? The Dow Jones Industrial Average was down 300 points this morning then up 300 points in the afternoon. At the close of trading the Dow ended up almost 299 points.

In looking at the broader S&P 500 Index, volume did spike higher in today's trading although the S&P is trading below a longer term uptrend.

(click on chart for larger image)

S&P 500 Trend chart January 23, 2008
In addition to the spike in volume today, the S&P 500 Index successfully retested yesterday's low. From a technical perspective this does provide a support point for the market. That is not to say the market can't trade lower over the near term, but today's trading was a positive from a technical perspective.

(click on chart for larger image)

S&P 500 Index chart of test of low January 23, 2008

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