Oil Hits New High, Dow Breaks Double Top Support Low

DJIA - 227.49, -1.77% SP500 - 22.69, -1.61% NASDAQ Comp. - 43.99, -1.77% Russell 2000 - 8.53, -1.16% Oil closed at a new high of $133.17. The DJ Transportation Average closed down 2.06%. Stock prices fell even further on Wednesday. The DJIA broke the support between it double tops which now generates a lower price target of 12,294. The DJIA also closed just below its 50 DMA. The S&P, Nasdaq Composite, Russell 2000 and DJ Transportation are still above their recent support lows. The S&P closed at its 30 DMA. The Nasdaq and the Russell 2000 closed above their 30 DMA. The DJ Transportation closed just below its 20 DMA.

If the indices rally on Thursday watch the R1, R2 and R3 short term resistance levels on Wednesday's large black candle. If a rally fails to break these resistance levels look for a resumption of the down trend this week.

Remember the Memorial Day weekend is coming and that the markets will be closed on Monday.

Decliners led advancer 2,210 to 917 on the NYSE while the Nasdaq decliners led advancers 903 to 1,991. While we changed our short-term trend reading to down on Tuesday, we are still maintaining our intermediate term trend reading as up on all indices except the DJIA, We stress the importance of watching the recent support lows on the other indices for potential trend reversal. Also watch for the same potential break of support on individual stocks. In our watch list most stocks declined. Today’s Action Moving Up: USO, DRYS, MA Moving Down: FSLR, BIDU, POT, X, AAPL, MOS, CF, DECK, RIMM, MON, CLF, AGU, GS, NUE, PCLN, STRA, UAUA, SOHU, LEH, AMZN, CNX, CELG, NKE, MS, V, IPI, SCHN, BTU, IBM, FWLT, GRMN, MER, MTL Intermediate Term Market Trend: Up Short Term Market Trend: Down