The Critical Pullback Goes Underway...

Yes, today's drop in the Dow officially kicks start the pullback that I have been talking about for the past whole week. This pullback is so incredibly important because where it ends determines the near term direction of the Dow! Again, if it ends before the 12750 level and turns around, the Dow could resume its long term bull trend and make Santa Claus rally happen. If the Dow breaks below the 12750 level significantly, we can say goodbye to Santa Claus this year and hello to the first negative year since 2002 (yes, the first negative year since the grand 2000 to 2003 bear market!). On the bright side, participation in the pullback has been light so far as investors await the job reports this Friday (see Stock Market Calendar).