The numbers dont lie... and the charts neither

Hello my Investors, Traders and Readers friends. Panic, distrust and uncertainty. These three words express adequately what is shown yesterday by the market. Panic, because widespread decline in prices of stocks threaten a major correction. Mistrust, because the main economic indicators (GDP, ISM and Jobs report, mainly) look worse and worse, giving the impression that a new recession could occur. Finally, sees great uncertainty because there is a perception that the top leaders do not know how reverse this situation.

Just as the numbers of GDP, ISM and Job reports, show a weak economy without which we will measure its impact, the stock market charts show a correction whose dimensions we can not anticipate. At lest for now.

Yesterday, the DJ-30 close at 11,866.62 points (-2.19%); the SP-500 close at 1,254.05 points (-2.56%); Nasdaq Comp. closed at 2,669.24 points (-2.75%) and the Russell-2000 closed at 440.06 (-3.40%). These levels leave the market in front of the test of the lows for the year, representing a level of support very, very, very important.

These support levels are at the following approximate values:
DJ-30: 11,555
SP-500: 1,250
Nasdaq Comp. : 2,600
Russell-2000: 438
The following charts can appreciate the situation of each of these markets and the precarious situation in which they are.

DJ-30.- It is 311 points in their level of support.

SP-500.- It is 4 points in their level of support.

What can happen?

1.- The authorities do nothing.- In this case, market forces would be responsible to lead the way.
2.- The authorities to act.- In this case, to be effective should be advertised in the short term, a set of measures to boost the economy. (QE3?).

What are the consequences on the market?
Mainly two:

1.- Rebound.- The panic and disorder are ideal for the market to react the way most investors and traders do not believe. In this sense, the market, without interference from anyone, take a new upward momentum.
2.- Break the support level.- In this case, the market began a new process of falling, damage to a much more severe correction and deep.

What is my opinion?
By nature, I am an optimistic person and I am always ready to receive the best that life offer my. That of course does not mean that the authorities hope tomorrow will clear signals of what they can do for the economy and this creates the beginning of the rise of the market. Nor does it mean that I think the market will react on its own and will begin a process of rise (which can also happen). What I think is in the next few days (possibly tomorrow), the market set a path. Or a process of major climb or break the support level. In both cases, the possibility of drawing too much juice the orange.