DJIALast week on DJIA, we observed a technical bounce when it touches the low of 10642.
DJIA started off the week with a strong momentum returned to 11050, and in line with the "operation twist" announcement -- DJIA rallied to 4/5 Fibonacci Retracement Level, marked the highest point of the week at 11373 and formed a downward channel.
From technical chart, DJIA will continue to face resistance at 11150 - 11080, and support at 10600.
Once DJIA break below previous week low of 10775, it will return to 10600 and next target 10450.
Otherwise, if --- any "operation twist", or any "rescue" announcement were made, then market will be boosted --- we will see the short-lived rally back to 11400, but, I do not think this is going to happen.
The Long-Term Bear market is "inevitable" - with high jobless rate (9.1%), bad market, bad consumer confidence... the bear shall lead us back to 9600 mark :)
Market is going to be volatile, with the trading range increasing day-by-day. Current range – 300 points. Traders are advised to reduce exposure on stocks, and short the indices.
Preferred level to short DJIA for this week: 11080.
YM resistance 10950 (trading at 10830 now), with a strong bear candle last Friday, aggressive traders can short at initial shadow 10900, SL 11900, TG 10600.
Nasdaq 100
Nasdaq 100 is sensitive and more volatile than DJIA; it has rallied 4/5, but also continues to drive south and already traded back to previous week low, so similarly, we are also having a long term bearish view in this market.
Current support 2140 (weak), next target (down) 2085, ultimately, Nasdaq 100 will return to the previous strong support 2035 (August 2011 low).
Aggressive Traders can short at initial shadow, NQ last traded at 2126, aggressive short 2140-2147, SL 20 points, TG 2115, TG2 2085.
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