Short Term Down Trend Starts...

The Dow broke its short term neutral trend to downside by 248 points as the bulls failed to make a decisive win after being in a 1 month stalemate. Investors are coming to the realization that the January Effect is not going to happen after all. What I like about this channel break is the way the volume is rising into the break steadily and not in a panic kind of surge and bond yields are also depressing gradually into the break as investors move for quality. Such a sensible retreat makes pretty strong bearish trends, which means that the bottom of the intermediate neutral trend channel of 7500 would be the next target and support level. 7500 was the November 2007 low and the lowest point the 2008 crash has reached so far. I still do not see the dynamics needed to break this strong intermediate trend and personally think that the 9500 - 7500 intermediate neutral trend channel will hold until something really changes in the economy.