Dow Down On Mixed Economic Data...

The Dow continued down by another 107 points today on better than expected housing data but poorer than expected store sales (see Stock Market Calendar).

In my opinion, today's move it more technical than anything. Investors sold off as confidence in this rally slowly faded away, to be replaced by the fear of the pullback everyone's been expecting. In fact, with quadruple witching coming up on Friday, some profitable investors would also want to take some profit off the table rather than risk the volatility. Certainly there are more ways to protect one's profitable positions in the face of uncertainty like the Protective Put, but not everyone thinks the same way. The Dow is now barely on top of its 30days moving average, which is the most important support for this intermediate bull trend so far. This move down, coinciding with the 200 days moving average, puts the Dow in an extremely disadvantageous position. As I have mentioned before, the 200 days moving average is a strong resistance level and the Dow isn't going to be able to break it without a fight. It seems like its happening right now.