Technicians Say We’re At a “Critical Juncture”

April 24, 2008 at 8:58 pm  ·  Category: Market Commentary, Technical Analysis

As I’ve mentioned before, observers of financial markets speak of “critical junctures” on, it seems, a daily basis. I try hard to refrain from using this phrase often, but I sincerely think we’re at a key juncture at this point, based on the charts.

– Tim Knight, Technician, “Critical Juncture. Honest.”, The Slope of Hope, Thursday April 24, 2:20pm PST

…. Decision time is at hand.  The market seems unlikely to stay where it is, give or take a few percent, for much longer.

– Michael Kahn, “No Rest for the Trading Range” (subscription required), Barron’s, Wednesday April 23

I use technical analysis as a way of orienting myself to the psychology of the market.  The charts are key because ultimately it’s prices that we care about and price action tells us what people are actually doing with their money.

I closely follow the views of a number of prominent technicians: Barron’s Michael Kahn, Stansberry & Associates Jeff Clark, Bernie Schaeffer, Tim Knight and Charles Kirk.

In the last couple of days, a couple of them have suggested that we are at a critical point for the market.  That’s primarily because we are approaching the 1400 level on the S&P 500 that has been such major resistance for most of this year.

I don’t put too much emphasis on exact numbers like 1400.  That is, just because the market breaks through and closes above 1400 doesn’t mean I’m going to change my view and believe the bear market is over – false breakouts are common occurrences, Kirk pointed out today in his review of the day’s tradingBut I do think that this rally should fizzle in the next few weeks and in the low-mid 1400s at best if the bear case is correct.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 

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