Markets Lower Ahead of Federal Reserve Announcement

Looks like the market is going to finish down today. I am somewhat dismayed that CLRK is below $17.00 today. I was hoping that it would hold above $17.00. I talked about even numbers being psychological support and resistance. For those that are not familiar with the concept. A support level is a price at which the market feels the stock is cheap enough that an inflow of orders creates enough demand to push the stock price back up. Support is formed when the stock keeps bouncing off a price.

Resistance is the opposite concept. A stock price rises to a point where people feel the stock is over valued and sell to take their profit. This act of selling causes the supply of a stock to increase resulting in lower prices. The stock is seen to rise and fall after hitting a price, the price becomes like a physical ceiling if you will. I think the market looks at even dollar numbers as psychological support and resistance.

This means that if CLRK can close above $17.00 the market will see $17.00 as support and buy stock when it gets close to $17.00 and hopefully cause the price to rise. If CLRK closes below $17.00, then $17.00 can become resistance and people will sell CLRK as it approaches $17.00. The act of selling as it approaches $17.00 will make it difficult for CLRK to make it above $17.00. That’s not to say it won’t happen, it will just be more difficult.

As we discussed earlier, tomorrow the Fed is meeting, It looks like not much will be happening before the Fed announcement. So all eyes will be on the Fed.