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THE TECHNICAL PICTURE

DJIA: This is a pattern of a bearish consolidation with resistance at 10625, and support at 10350.

DJTI: If it breaks down from channel support, the downside target is 3300.

SP500: This is a pattern of a bearish consolidation with resistance at 1200, and support at 1175.

NASDAQ: This pattern suggests that NASDAQ eventually will get down to 1900.

 
HUI: This is a pattern of a bearish consolidation, and today we got a marginal break-down.

USD: Twice it has reversed at resistance. It will try again for the third and final time.

Oil: This is probably a double top.

Utilities: Resistance at 370, support at 360.

The pattern has the looks of a bearish consolidation.

The pattern has the looks of a bearish consolidation.

Summary

Despite today's spirited recovery, the indices still remain below resistance. A close above resistance would suggest "success" while a close below support (see table below) would suggest "failure." We believe that the odds favor "failure," but we learned a long time ago that it doesn't pay to argue with the market. If the markets close above resistance the trend will turn up and remain so until it turns down again! We expect failure, but we know better not to argue with success. In other words, the best place to be at the moment is in cash until the market--through its failure or success--gives us a reason to go partially long, or partially short.

Ike Iossif

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