The Dow revisited its 200WMA last week in a solid landslide week and is once again sitting right there on the 200WMA. As I have mentioned before, everytime the Dow breaks below the 200WMA, it goes into a significant down trend and being here once again after failing a reversal attempt along with so many fundamental issues in US and Europe makes it a very dangerous time to try to spot for longs. The Dow also formed a short term head and shoulders formation which also puts the odds in favor of a downside breakout. Unless this week pulls back up strongly, the market could go very much lower with immediate psychological support at the 10,000 points level. It is going to be a fairly quiet week ahead with no heavyweight economic releases, as such, the only way the Dow could pull back up strongly would be due to developments in the European debt issues. That is something nobody can predict for now.
For now, the Dow remains in short term neutral trend, intermediate bear trend within a primary bull trend.
