Looking At The Charts

Sometime the market makes it so easy and clear for us to see what it is doing and where it is going, and sometime it disguises itself and try to throw us off. But if you look at the price charts carefully, you will see what the market is doing and get a clue on what it might do. I am not saying the charts are completely infallible, but if you look at them correctly, it will give you an edge. If you are a trader and you are not looking at the charts, then you are at a disadvantage.

Check the charts from today and see how the SP500 hit the 1100 mark and came to a halt (make sure to look at the 15 minutes intraday chart for more detailed price action at 1100), Nasdaq 100 hit 1810 near the 1815 resistance level, the DJI hit intraday 10,320 and pulled back under the 10,315 resistance, and the Russell 2000 hit the 625 level and close near it.

The next thing to watch is how these indices react to these resistance levels. If they pull away, look for the next resistance level for reaction. If they pull back, look at those levels below these resistance levels for possible support. The market will tell us which direction it will take if you pay attention to the price action.

SP500:



15 minutes intraday SP500:



DJIA:



Nasdaq 100:



Russell 2000: