In focus: Bears finally in control

By Lawrence G. McMillan

The bears have finally managed to take control of the stock market, mostly due to some worries about upcoming economic and regulatory issues. However, the market has quickly gotten oversold, so a bounce may be forthcoming in the near future.

The Standard & Poor’s 500 Index ($SPX) broke down through some important support levels in the last couple of weeks. First, 1,430 level gave way, breaking the bullish uptrend line that had existed since last June. Then, perhaps a more important level at 1,395 gave way last week. Since then, things have pretty much gone the bears way. Today’s action has broken down below 1,370, another support area, meaning that prices as low as 1,330 are now in play. Of course, the fact that politicians and media alike are all over television, raising scary fears about the fiscal cliff do not help...

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