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The Dow has lost another 100 points overnight, closing below 10,000 and the 50% Fib retracement level. The technical indicators on the Daily Charts for both the SPI and the Dow Futures are sharing the same contention, favouring the downside. Right now the technical analysis seems to be winning out with 10,000 being a symbolic level on the Dow. Being below this significant level, is giving quite the melodramatic tone to the markets.
The technical picture for today's trading day is illustrating the SPI trading below average price territory and continued favour for the downside from the technical indicators. The trade momentum is supporting the indicators and clearly supporting the downside for trade today, especially after closing on the overnight lows. There is strong resistance is at 4500 and then at 4550 with good support at 4420/5 and further at 4400. The SPI made a very good attempt to break out of the downtrend channel but couldn't confirm the move, and as such we have seen a breach of the significant level 4500. We have since closed below this level and seemingly confirmed the downtrend. XJO and SPI discrepancy is back to a big discount this morning with a 79 point difference being displayed.
The Daily Chart has broken out of its consolidation period confirmed the new downtrend direction. The important level 4500, was tested this week and failed which consequently now sees price action at 4442. The continuation of lower lows and lower highs being formed is just another indication that the longer term momentum is certainly favouring the downside, with a new lower low formed this week. The Weekly Chart has just switched its favour the bear to coincide with the Daily Charts contention. The XJO is poised for a negative day with the ADRs supportive of this inference by signalling a weak open. Intra-day trades should be considered with the support/resistance levels.
Potential Levels of Resistance for today: 4460, 4480, 4500, 4525 (Further resistance level 4550)
Potential Levels of Support for today: 4390, 4400, 4425, 4440 (Further support level 4375)
Today's Potential Trading Range: 4416 - 4474
SPI Daily Chart - the support level 4500 (38.2% Fib Retracement Level) was breached last week and we have since declined further and confirmed the downtrend, with the technical indicators supporting the downside
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