-We broke through very stout support at 7449.  In order for the move to be a valid break of support, it must retest 7449 and confirm that old support is now new resistance.  We should have that retest this week.  Should the index break back above 7449 with volume, then 7449 will still be good support.  We are due for a Bear Market Rally soon.  We are testing a triple bottom as seen in the 20 year chart of the DOW.  If this recent break of support is confirmed, then the next stop is 7197 from Oct. 2002.  Additional support is found at 6500 from early 1997, 5500 from 1996 and 3500 from 1994.

-We experienced a classic capitulation ay with a Hammer candlestick at the bottom of the trading range testing multi-year lows on big volume.  I was early on my call last week, but I cannot deny what the charts are telling me.  We are due for a Bear Market Rally with the first test at the swing low of 804 from Januaty 29th.

-The COMPQ has been most resilient in this downtrend.  It is my opinion that the NASDAQ and Small Caps will lead us out of the wilderness.  Look for the index to first test the recent gap down at 1460 on a bebound.

-The Macro picture of the markets are revealing.  Many times we get caught up looking too closely at the small swings in the market and forget the big picture.  This confirms that we are at a critical level.  I look for the beginning of a turn around here.

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