The Dow found the 12614 - 12707 level too tough to climb over and has now retreated lower.

Traders found that the thrust lower in last Fridays trading session may be pointing to more downside in the weeks to come. The move appears to be impulsive and suggests that weakness is still inherent in the index.

As mentioned previously it will require substantial effort to take the market higher and unless we quickly get above the resistance level the market is losing ground for the bulls.

My analysis suggested that if the Dow broke below 12520 then we could see the bears take over and this pattern has indeed played out.

It would take a move above 12650 to turn this market around and for now we should be looking at downside targets of 12200 – 12067. Although we are at a minor support level which comes in at 12335, let’s see if this level holds and how much of a bounce transpires from here.

The concern is that if the support levels do not hold and we see more sellers come into the market, then there is a high probability that we could get down to 11325.

Also we now have the RSI posting a sell signal yet again and the index below the 20 day Moving Average. So in summary the market just lost its hand to the bears and they seem to be back in control.