It’s a bear market

The Dow Jones Industrial Average rallied Tuesday on fairly light volume. Expect resistance at 11500. This is a bear market, with reactions to good news likely to be short — and declines from bad news severe. Target for the next decline is 10000*.

Dow Jones Industrial Average

* Target calculation: 11000 – ( 12000 – 11000 ) = 10000

FTSE 100 tests support

The FTSE 100 Index is testing support at 5000. Breakout is likely and would offer a target of 4400*.

FTSE 100 Index

* Target calculation: 5000 – ( 5600 – 5000 ) = 4400

Europe crashes

Germany’s DAX Index is testing support at its 2010 low of 5400. 13-Week Twiggs Money Flow below zero warns of further selling pressure. Failure of support would offer a target of 4500*.

Germany DAX Index

* Target calculation: 5500 – ( 6500 – 5500 ) = 4500

France has fallen well past its 2010 low, testing support at 3000. 13-Week Twiggs Money Flow again warns of further selling pressure. Breach of 3000 would test the 2009 low of 2500.

France CAC-40 Index

* Target calculation: 3000 – ( 3700 – 3000 ) = 2300

Secondary markets are as badly affected. The Amsterdam AEX Index fell below its 2010 low, while 13-week Twiggs Money Flow below zero warns of selling pressure.

Netherlands Amsterdam AEX Index

* Target calculation: 300 – ( 340 – 300 ) = 260

TSX 60 headed for long-term support

Canada’s TSX 60 Index is falling sharply, headed for medium-term support at 665, but long-term support at 650 is just below. Breakout below 650 would warn of another down-swing, with a target of 580*.

TSX 60 Index

* Target calculation: 650 – ( 720 – 650 ) = 580

Nasdaq breaks support

The Nasdaq 100 broke support at 2050, warning of a down-swing to 1900*. Follow-through below last week’s low of 2040 would confirm. The latest peak on 21-day Twiggs Money Flow, barely breaking the zero line, indicates strong medium-term selling pressure.

Nasdaq 100 Index

* Target calculation: 2050 – ( 2200 – 2050 ) = 1900

The Dow is headed for a similar test: follow-through below 10600 would confirm a down-swing to 9600*. Higher volumes indicate the presence of buyers and failure of support would prove seller’s dominance.

Dow Jones Industrial Average

* Target calculation: 10800 – ( 12000 – 10800 ) = 9600

The S&P 500 is testing support at 1100 on the weekly chart. Failure would signal a test of 1000. 13-Week Twiggs Money Flow below zero warns of further selling pressure.

S&P 500 Index

* Target calculation: 1125 – ( 1250 – 1125 ) = 1000

Dow threatens support

The Dow Jones Industrial Average fell sharply on Thursday, accompanied by strong volume. Failure of support at 10700 would complete the dead cat bounce, offering a target of the 2010 low at 9600*.

Dow Jones Industrial Average

* Target calculation: 10800 – ( 12000 – 10800 ) = 9600