DJIA 3/708 WEEKLY MARKET REVIEW

PRICE AND TURNOVER
Close: 11,893.69
Change: TODAY -146.70(-1.22%) WTD -372.70(-3.04%)
Volume: 768,978,432

MARKET BREADTH (NYSE)
Net adv/dec issues: -970
Net new highs/lows: -367
Net up/down volume: -1,564,051,683

TECHNICALS
Major consolidation, Intermediate downtrend(resuming), Short term consolidation
Core Support: 12,000 Resistance 14,000
Immediate Support: 12,000 Resistance: 12,800

OUTLOOK
The intraday range of 274pts is characteristic of today's volatile trading. The index drops right off the starting gate. The buyers quickly manage to bring its head above water only to give up a half hour into the session. Selling pressure catches traction and the index freefalls to 11,819 shortly before the close at which time buyers step in to end the day with the Dow off the lows. The market finally settles at 11,893- 1.22% lower for the day and 3.04% lower for the week. Today's price action is significant because (a) there is a penetrating close below the core support of 12,000, and (b) the index breaks below the short term range pattern. If this breakdown is valid-most technicians impose a 3-day 3-% filter rule on major breakouts-then it simply means that the majority of the buyers changed their minds and no longer consider prices at these levels as good entries. If this is the case, then we can expect little or no opposition to future selling pressure in this area and the index could fall by 800 pts to around 11,200 which is the price objective of the short term range pattern. On bigger scale, a downtrend that continues until Apr-2008 could lead to a shift in the major trend from consolidating to downtrending. The definition of a bear market that I choose to embrace is a declining primary trend, so personally, if that comes to pass, the bear market would have begun.