DJIA nearing the 13000 level

DJIA dropped 208 points overnight to close at 13029 level with more signs that the weakness in the housing market is beginning to impact consumers' spending. In addition, hedge funds are facing withdrawal demands from their investors at a time that the assets are hard to sell.

The sharp fall in DJIA has brought the index almost to the psychological 13000 level. A break of this important level could see the DJIA testing the next horizontal support of 12850 (the February high) and thereafter the long-term uptrend line support of 12750. The latter support should hold but a break of this level could well signal the beginning of the bear market for Wall Street; something that is hard to imagine just 2 months ago.



Chart: DJIA's daily chart as at August 14 (courtesy of Yahoo Finance)