No time like the present

I have been patiently waiting for the DIA bounce to de-materialize and I think we finally have a break of the flag pattern's lower trend line. Check it out...

I am quite excited about this week and the near term future as the DOW (and subsequently the DIAmonds) sets up for a significant plunge. As of this writing the E-mini DOW futures are showing a morning opening below the trend line. I expect that buyers will step in and force a test of the ascending trend line - if that test fails to break through then the bears will be out in force with a DOW target of 10200 (102 on the DIA).

The SPY has the same basic pattern as the DIA, but has not put in a close below the ascending trend line:


That said, it pierced the 38.2 % fibo with conviction - but the trend line held and the lower tail kissed the 20MA so there is a touch more support to crack. Some bad economic news in the morning should soften these support levels up nicely and bring the bears out looking for 113 on the SPYders.