Qs closed at 47.92 after reversing at 46.46 which is 61% of Mar2007 and about 40% of Jun-Jul2006 rally. It is 15% correction from 10/31/07 high. Also, there are other technical analysis that I do showing the support.
As shown on the weekly chart, it is weekly uptrend line support.
I have noted that I was looking for a reversal to trade up for the next few months after a sharp correction which is one of the worst first week of new year performance since 1937. Also after the INTC correction, I noted that much of bad earning news is priced in as we can see on INTC chart, it has fallen off from cliff as if the company reported bad earning news. This is different from the last earning report season when market priced in good news. Now I think that market has priced in bad news, so any good earning reports will take markets higher.
SPX closed at 1409.13 after reversing at 1378.07. As noted earlier closing above 1400 is a good sign of reversal with the price formation ending {4} of {5}.
DOW closed at 12735.31 after reversing at 12501.76 which is LT TL support from Oct 2002 as well as the Aug 2007 low support. My other technical analysis shows the supports at the reversal points today.
Today's market action is a good sign of market reversal; therefore, I think that markets have bottomed for the next few months. Will look for a confirmation.
Bernanke will speak at 1 pm tomorrow.
Hopefully he will not say something will scare market even though DOW p/c ratio is negative.
This is an interesting picture reminding me of the 1977 movie, "Close Encounters of the Third Kind". I rarely watch movie twice, but I have watched the movie twice at that time. There was something about the movie which I liked.
http://trend-signals.blogspot.com/2008/01/close-encounters-of-third-kind.html
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