PRICE AND TURNOVER
Close: 12,266.39
Change: TODAY -315.79 (-2.51%) WTD -114.63 (-0.93%)
Volume: 793,653,696
MARKET BREADTH (NYSE)
Net adv/dec issues: -2,412
Net new highs/lows: -176
Net up/down volume: -3,853,580,238
TECHNICALS
Major trend undefined, Intermediate downtrend, Short term consolidation
Core Support: 12,000 Resistance: 14,000
Immediate Support: 12,000 Resistance: 12,800
OUTLOOK
The steep intraday decline on rising volume reveals severe selling pressure closing the index 315pts lower on a downtick. Today's close is significant for the following reasons. (1) It confirms - as I noted in yesterday's post regarding a near term 2 day reversal signal - that Feb-27 is indeed a reaction high and that a fresh downswing is underway, (2) It strengthens the significance of the 12,800 resistance level - confirming that a good number of sellers continue to wait for the index to reach this level before unloading. (3)The penetrating close below the triangle pattern warns us that this current consolidation may be ending and that the index will likely be resuming the direction of the prior trend which is downward. If this breakout is valid, some chartists will find it reasonable to expect a 1,200 pt drop to the 11,200 level which is a textbook price objective using the height of the area pattern. Others, like me, will be more patient, wait and take a closer look at how the index will behave when it hits the 12,000 support - it could continue to consolidate and form a range pattern.
Close: 12,266.39
Change: TODAY -315.79 (-2.51%) WTD -114.63 (-0.93%)
Volume: 793,653,696
MARKET BREADTH (NYSE)
Net adv/dec issues: -2,412
Net new highs/lows: -176
Net up/down volume: -3,853,580,238
TECHNICALS
Major trend undefined, Intermediate downtrend, Short term consolidation
Core Support: 12,000 Resistance: 14,000
Immediate Support: 12,000 Resistance: 12,800
OUTLOOK
The steep intraday decline on rising volume reveals severe selling pressure closing the index 315pts lower on a downtick. Today's close is significant for the following reasons. (1) It confirms - as I noted in yesterday's post regarding a near term 2 day reversal signal - that Feb-27 is indeed a reaction high and that a fresh downswing is underway, (2) It strengthens the significance of the 12,800 resistance level - confirming that a good number of sellers continue to wait for the index to reach this level before unloading. (3)The penetrating close below the triangle pattern warns us that this current consolidation may be ending and that the index will likely be resuming the direction of the prior trend which is downward. If this breakout is valid, some chartists will find it reasonable to expect a 1,200 pt drop to the 11,200 level which is a textbook price objective using the height of the area pattern. Others, like me, will be more patient, wait and take a closer look at how the index will behave when it hits the 12,000 support - it could continue to consolidate and form a range pattern.
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