Support Levels Failing

Already this morning, just half an hour into the trading day, two indexes (the NYSE Composite and the Major Market Index, $COMP and $XMI, respectively) have had the low prices taken out that I cited recently. As price action continues to unfold, bears are very slowly grabbing hold of power.

This is a war of psychology, fought with dollars. The direction of the market is driven by widely-held beliefs, and shifting those beliefs takes time. I feel we continue to be in a "transition" phase of the market where power is slowly being handed from the bulls to the bears. In my next posting I'll take a look at the big picture, measured in decades rather than months.