Yesterday, stock futures closed the day below the key technical support level of Dow 8000 (the S&P 500 also violated the key 850 support level), raising new worries that a new round of technical-based selling may occur soon. Furthermore, we are only a few hundred points from the November 2008 low, and the nearness of this price support level raises to an even higher level the significance of these price levels. Overnight, the Dow has moved higher to about the Dow 8000 level, so anything can happen today. Generally, if yesterday's close is confirmed by prices dropping below yesterday's low, more selling would probably be the natural consequence. A breakout of yesterday's low by an even lower price is my own personal method of indicating that prices are going to continue downward. I consider that a confirmation of yesterday's low, and thus, evidence that prices will continue still lower. I'm sure many others use the same confirmation method.
