Dow Under Heavy Resistance

The Dow experienced heavy resistance at the 8500 level for the past 2 weeks. Its short term has also turned neutral bounded by 8500 and 8250 along with a steadily declining trading volume. This certainly flashes a red light on the intermediate bull trend. Its 30DMA has also caught up and the Dow is now trading right on top of it. The 30DMA is an extremely important support level for intermediate trends and long term trends and a significant break below the 30DMA would spell the end of the intermediate bull trend (every technician would have their own way of defining this point). The Dow needs a determined break above 8500 to continue the intermediate bull trend and this week's data may be the key to deciding if that happens or not.

This is going to be a pretty heavy week with important data such as the consumer confidence tomorrow, retail sales and existing home sales on Wednesday, Durable goods and jobless claims on Thurday and GDP on friday (see stock market calendar). No matter how these numbers turn out, we can be sure that this is going to be a volatile week as well.

For now, the Dow is in short term neutral trend, intermediate bull tend within a primary bear trend.