Intermediate Correction Continues...

The Dow ended its recent bull trap and continued to head downwards, closing down by 59 points.

Fundamentals
Economic data continues to favor to downside today as Jobless Claims turned in worse than expected once again. Analysts were expecting a lower jobless claims for the week but actual data came in not only higher than expected but higher than it is last week. This led to an immediate reaction in the US market today, opening downwards strongly. In fact, the Dow went down as much as over 200 points in the morning before bargain hunting stepped in strongly for the rest of the day. Investors were clearly buying into every weaknesses lately as most speculate the end of this intermediate correction.

Technicals
Indeed, this intermediate correction isn't giving up without a fight and definitely not on a V shaped reversal. The Dow headed back down to last week's low before bargain hunting set in strongly. This shows that there is indeed significant strength around the daily 200MA level and that this intermediate correction could end around that area as I have previously predicted. Huge hammer candlesticks like the one formed today usually leads to one strong down day the next day and then we should see some struggle around the daily 200MA level before the market can decide where it wants to go next.

For now, the Dow remains in a short term and intermediate term bear trend within a primary bull trend.