Is it the news, or is it the charts?

The newspapers are full of the fact that the US Government is about to close down a variety of its services because the Congress refuses to vote budget measures through. As ever its after the fact: an easy answer to the question: why has the stock market fallen today?

Just look at the chart and it is obvious that the odds were excellent, before the news, that the market would fall by a hefty value. Indeed the market is currently pulling back from its low point for the day so far, so it might not turn out to be quite so bad.

The interesting question, and the one to which there is no answer: will the market bounce back from that support level at around 14900? I am not going to guess.

What I will say is that if that support fails to hold there is little certainty left until the market reaches the 14000 area. There the old all time high of October 2007 at around 14200 provides one level of potential support; and a diagonal support line which started life back in November 2011 provides another at around 13700.

Lets hope for the best and brace ourselves for the worst.