Let's Get Technical

The market continue to be volatile, making it very difficult to get a sense of where the market will go based on fundamental analysis. Not saying fundamentals are not important to the long term direction of any given stock, but at the current environment, one needs to get technical to even have a chance to survive trading in this market environment. With that said, let's get technical and see if one can get a clue on where the market might be headed.

Here are the charts for the DJIA, SP500 & Nasdaq 100 (click on the chart to get a large image):





All these charts showing the indices are near resistance level and showing key support level. If the indices break above their resistance level, the market will most likely rally back up to the November high level. But if the indices break their respective support level, get ready to look for new low. If the market does rally, don't get caught over staying with your longs. After all, the market primary trend is still down.

Here are a look at the inverse ultra ETF for the above indices:





Conversely to their respective index, these short ETF are near their support level. If their respective index break support, watch for these inverse ETF to hit new high.

The important take away point from these chart is the market can go either direction, and no matter which direction it decide to go, one needs to be very careful and don't get caught on the wrong side of the trade. If in doubt, move to the sideline. It is alway better to miss a rally or a selloff then get caught on the wrong side of a trade.