Rob, whether markets are rational or not does not detract from my statements that support and resistance lines only exist in the mind of the beholder - they do not exist outside of the eye that sees them. And when they get "broken" they disappear only to be replaced by another arbitrary line that we choose to draw.

The market is always hard to predict becuase it requires you to know the future....


>Although your argument is rational, markets are not. If we break through the support levels, the market will go down briskly. Its become very hard to make predictions lately because of the manipulation of the markets by Gov'ts, the plunge protection team has worked hard to make sure this support level holds, but they can't do that forever.
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>>Support and resistance lines exists until they no longer exist. They are only "drawable" in retrospect. With so much data that the markets generate you can find a pattern or line in some past stock price chart to match anything you want.
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>>>The concept of support, although not really tangible, does have some merit because many investors (and computer modeling software) uses similar rules in their actions and it becomes self reinforcing. We have actually been in a trading range for a while, but it is becoming more clear everyday that the people running the show are clueless about how to stop the bleeding.
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>>>>>Looks like we are going to retest the lows, if it doesn't hold there is no support in sight.
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>>>>>3800 on the DOW by the end of the year is my estimate, Obama's team is not inspiring confidence.
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>>>>>Personally my holdings are up, Cash, TIPs and Gold
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>>>>>It won't end until the banks and gov't stop lying to us (and each other) about the crappy assets on their books which doesn't seem to be in the cards.
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>>>>>But you guys in the UK aren't doing any better
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>>>>The world is a village so no one escaped when the cr@p hit the fan.
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>>>>"Support" is such a funny investing concept - "if it holds at X then there is support otherwise it will fall further" - sort of states the obvious. There is no "support" in the market for a particualr index value - the market simply reflects the net buying and selling action of all investors, who trade for a million and one reasons, at any moment in time. Looking for support is a suckers game.
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>>>>I agree that there are too many liars talking ...