The Dow pushes through 11,000 in the likely beginning of a larger retracement. Well, we got our answer this morning. Shortly after the Open, the Dow moved on down to take out 11,000, then 10,980 and then on down to settle at 10,871 for a 150 point drop for the session. The reason is, there is a long upper trendline in the Weekly Chart at this level, and there is also significant support built up across time there. A failure through this level is important and recognized by many market players.
Fewer folks are willing to buy in the face of a potential, major retracement.
One technical factor that does bear discussion is the way the market has pulled back to 10,870. You don't see a rapid decline, only a slow stair-step descent. This kind of decline is likely to see a fairly stiff reaction rally. If we get such a rally, and it pushes us through 11,000 we will exit our Shorts. I am suggesting using 11,000 as our next fulcrum because we have broken it.