Dow Is Back In Bearish Phase

Market got their first big sell off after a week of gains that carry the Dow Jones Industrial Average to 10,400 level. Bears got the sell off that they were looking for on Friday with a drop of 261 points. The index is now below its 50 and 200 day average, driving the market back into “Bearish” phase as indicated in the phase chart.

Earning results gave stocks like Alcoa and Intel a good bounce. However, they were not able to hold onto their gains.

This market looks to be following the “Buy on rumors sell on news” syndrome. With the index now back in “Bearish” territory, good earnings results may not be able to drive the market higher.

S&P500 Dead Cross

The dreaded dead cross where the 50 day moving average goes below its 200 day moving average appeared on the chart of S&P500 index. This brings the index into “Bearish” territory based on the phase chart.

The Dow Jones Industrial Average has confirmed its head and shoulder pattern and this gives a downside target of 8500. Similar head and shoulder pattern is also appearing on the S&P500 chart.

All these signs point to further weakness in the market.