This week's rally was based on the follow through on Thursday above the 5-day 50% level.....
However the push down from the 50% level, and the coming together of the daily channels has sent the market down, breaking the channels lower....
US markets have continued down into some very important levels today......
The important part of any major bull trend and support is the Yearly 50% levels based on the past 3 years of trading
12347 DOW CASH and 1374 (S&P cash)
We have already seen how markets have sold off from the Yearly balance points in 2008 down into these levels, but it's these levels in the market that define overall Trends in the market
These levels in both markets are extremely important because it becomes the 2nd phase of the bear market which can send the market down into much lower levels in 2008....
These levels in US markets have often seen support within the Quarterly timeframe, but as pointed out before, the support has been occuring above the Yearly balance points, in 2008 it's not the case.
We can often anticipate reversals in the market by using support or resistance and trading the follow through the next day, that next day was Thursday, and Thursday's price action in the US doesn't show that anyone is really interested in any UP trend continuing at this stage...
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