DJIA 11/11/08

CHART WATCH
* Coming from a prior short term downtrend the index has turned sideways for the past 4 weeks inside the major boundaries of 9794 and 7773.
* A triangle unfolds after hitting pairs of declining peaks and rising troughs in October and November. This is considered a continuation pattern that likely breaks in the direction of the previous trend. Expanding volume in the declines appear to support this view.
* Breaking the pattern to the downside signals a resumption of the downtrend and will lead us to a test of the October low of 7773. A break below 7773 will confirm this.
* For now, this consolidation is viewed as a temporary pause or correction to the short term downtrend.

INDICATORS
* The long term and intermediate MAs are clearly on the downtrend while the short term MA reflects the current pause or correction.
* The MACD is below zero indicating a declining trend and while the upward slope shows an upleg, the narrowing gap in relation to the signal line signals a weakening.
* The index is below the BB centerline for the last 3 days. The likelihood is that it will continue to the extremity of the lower band which now stands at 8154. This becomes the interim TP.

MARKET SENTIMENT
For now, the consolidation is viewed as a temporary correction of the short term downtrend which is likely to resume once the pattern is completed. SELL.