The Morning Call-Rumors of a healthy US financial system were premature

The Market

Technical

The indices (DJIA 12573, S&P 1334) drifted lower yesterday but remain well within their primary trends: (1) the short term trading ranges [12022-13302, 1266-1422] and (2) the intermediate term uptrends [11959-16959, 1258-1838]. Within the short term trading ranges, additional support exists at 12344, 1292, resistance at 12903, 1384.

Wednesday, I noted that there were several near in support levels: (1) the 50 day moving average: the Dow busted this level on Wednesday moving still lower yesterday, the S&P closed yesterday right on this moving average [1334], (2) the very short term uptrend off the June low: again, the DJIA violated this trend line Wednesday, while the S&P did so yesterday (1336). Our time and distance discipline is operative here though to a lesser extent than applies to a primary trend. That said, the above pin action may portend more downside,

Volume rose; breadth weakened. The VIX closed down but remains well above the lower boundary of its intermediate term trading range and continues to develop a head and shoulders pattern.

GLD fell but finished well above the lower boundary of its intermediate term trading range.