The Market Will Drop Fast -- Don't Waste Another Second
by Chris Rowe 06/23/09
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Look Out Below
The internal markets are clearly showing that supply is in control. The trend is showing that more and more stocks are breaking support levels, and more and more stocks are moving lower.
The popular market averages have already "confirmed" what I'm telling you.
First, we all knew there was resistance right at about 950 on the S&P 500. It has had problems breaking through the January top for a couple of weeks now (see the red horizontal line and gold arrows on the chart below).
Then we saw the third fan line violated in mid-May. The fan lines are the three blue trendlines you see below. Notice that after each trendline is violated, that trendline becomes the new resistance level (red arrows).
Each time a trendline is violated, we draw a new one. When the third one is violated, it's considered an official reversal of the uptrend. Notice, that after finding resistance after violating the third trendline, the external market (S&P 500) traded sideways. (To learn more about identifying trends, see Chart Your Way to a Lifetime of Profits.)
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