Markets continue their post Obama election plunge and now hover at the bottom of the trading range.

The above chart shows the recent 3 month period and record move into bear market territory for the DOW 30, S&P 500 and NASDAQ Composite indexes, general barometers of overall market conditions.


Note the moving average (yellow line) is still trending down and, while U.S. markets closed above the October lows, a key moment is now at hand.





The next chart (above) is a candlestick chart for the DOW and shows the actual moves on each given trading day and the range covered during each period of trading. Two horizontal lines - black (outer) and blue (inner) lines highlight the trading range that has now been established. For those trading on technical factors, beyond market fundamentals, this remains the established range the markets have decided should be trading at given the prior likelihood and now pending certainty of the coming Obama presidency.


Note the optimism leading up to election day when there remained some glimmer of hope as McCain Polls Close + Stocks Rise. As soon as the results came in the momentum shifted and the plunge began.


This has been the largest market decline following a presidential election ... EVER.


And there's good reason.


Obama's selection of Rahm Emanuel and announcement he would immediately issue an Executive Order to promptly end any "consideration" he'd promised to give for domestic oil production sent a strong signal that Obama intends to quickly move to the far left and drop the centrist rhetoric that was the focus of his presidential campaign.





But most worrisome this day was the news that Iran has tested a new missile that is not only capable of reaching Israel but demonstrates conventional fuel technology that will minimize the ability of Israel and others to detect any potential launches.


Now the veracity of these claims are left to some question given the propensity to Photoshop prior "accomplishments" and the apparent disparity between the light of day and dark of night in the video provided (above) by the Iranians. [U.S. Intel believes the missile later broke up in flight]


But as the moon shines bright tonight it's now just a matter of weeks before the darkness afforded by a new moon that may prove to be Israel's last best chance to take on the menace posed by Iran's nuclear threats before Obama takes office in January.


Paulson's shifting strategies - given the public's disapproval of John McCain's plan to bolster homeowners with the remainder of the bailout plan - weren't any help ... but it's the prospect of WW-III and an untested leader who Joe Biden has already promised will not respond effectively ... that's most unsettling to volatile markets.


Short sellers owned the day on Wednesday but they're at the bottom of the range once again.


Asian markets are once again collapsing but it will be the momentum investors that rule this coming day.


If the markets should maintain support at these low levels, a successful bottom test will be established and another short squeeze will be in order.


If the market is unable to sustain support at these levels it will be a long and increasingly lengthy bottoming process over the coming weeks + months.


Caveat Emptor


BOUNCE: Ever so slightly - Stocks fluctuate on jobs data


OIL: Oil falls below $56 - "As the global economy continues to weaken, we're going to see further downward pressure on oil," said Stephen Roach, chairman of Morgan Stanley Asia, in Singapore. "I think we'll certainly challenge the $50 threshold. We could challenge the $40 threshold."


SQUEEZE: After treading water and even dropping to set a new low the shorts give in, turning up the volume and sending markets up, up and away 6% - 7% + the DOW closing UP 552.59 on the day. This reinforces the outlying bands of the range but setting a new low first means there will be further testing and turbulence in the days + weeks + months ahead.


preciseBusiness™