The Stock Market has been trading sideways for quite awhile now. Some analysts are saying that it is making a bottom, while others are not convinced it has finished its sell off.
The key resistance areas, that are above today's market price by 40 points on the S&P, have resisted the bulls' attempt to drive prices higher and the market experienced a large one day sell off unlike any seen for a couple of months.
There are some key resistance points to keep an eye out for. On the S&P it is the 800 level. If the market closes below that level and does not quickly reverse back above, then the odds of visiting the previous lows of 739 increase. If that level is broken then watch out below.
On the Dow the key support area is the previous lows around 7,400. If that level is broken and not quickly reversed then the bottom could retreat to 6,000. Some more conservative analysts have indicated the bottom would be around 6,500.
At any rate, being prepared for a potential fall of this magnitude would offer some great bargains and profits to be made from a snap back rally. Keep your eyes open.