Bears Strike Back!

FUNDAMENTAL ANALYSIS
ISM index showed a consistant advance coming in at 49.6 versus 48.6 in the previous month, suggesting that the worst is over and the economy is on the way to recovery. Crude oil also came under huge pressure as investigation commence against hedge funds manipulating crude oil prices. So why is the Dow still down 134.5 points? There seemed no clear explanation today except for the fact that investors do need to take some profit off the table after the Dow staged such a significant retreat at the top of a good 3 months rise. The next big thing this week will be this Friday's Jobs Report (see economic calendar). Again, the Job report is expected to support the economic recovery story.

TECHNICAL ANALYSIS
The Dow is right back onto its 12500 support level once again to the disappointment of many traders. 2 roads lead on from here... 1, Rebounds tomorrow and resumes uptrend. 2, Breaks support level and head for new lows. There are still considerable and measurable strength in the internals so the odds are still slightly in favor of the bulls. However, if you are still long stocks, it is time to at least consider hedging your position.