London - Whilst indices across the board declined over the previous week the Dow Jones managed to accumulate a positive close of +158 points. However the start of this week has eradicated the gains and took the index lower in Mondays trading session.

The interesting factor is that in last weeks trading session, the Dow had posted a Sell signal with the momentum indicator falling together with the index crossing the 20 day Moving Average and also breaking 12700 on a short term basis. We also mentioned that the "outside bar" formation provided a negative picture for short term traders.

Also we should note that we could possibly have formed a Wave 4 which could suggest that we are likely to experience either sideways or lower prices for the weeks ahead. The larger degree trend is still down and the wave count supports the idea of lower prices.

Currently we have a support level of 12455 12385 which really needs to hold if we are going to cut through the negative period and the index will need to climb above 12695 to head upwards towards the resistance levels which have pushed the market back for several weeks.

With the oil market also having an effect on indices and sentiment we can still expect volatility to be around for the moment. If Crude Oil starts to pull back then it is possible that this may have a positive impact on the Dow Jones and other markets.

But for now we should keep a close eye on the near term support levels which if broken could take the index lower towards 12208.