Stock Market for Dummies - Stock Chart Analysis VideoCheck out this video on the SnP market charts from the Old School Chartist
Basically OSC has been saying for a while now that if the SnP breaks down below a certain line around 1245 then it will be heading down another 75 - 80 points. Well, that support of around 1245 was broker yesterday (Wednesday) and it loks like we are heading for another down day today (the FTSE is down around 100 points so far today and the DOW futures are also pointing down).
For beginners to stock trading and stock charts it is very useful to see how traders with more experience interpret stock charts. Stock charts are not infallible of course, and neither are the interpretations of them, but there is a widely held belief that the news comes out in the charts first. Primarily because people in the know - generally institutional traders - place their positions before everyone else gets to join in.
This institutional trading can be seen in the charts and when the rest of the traders join in this merely accentuates a trend that was already there.
For a slightly more detailed look at charts and why professional stock and forex traders use them, check out - stock charts for beginners
For a VERY detailed explanation of charting for traders of all levels then you can download this 272-page ebook from Amazon Getting Started in Candlestick Charting