Trend_T_Trader's  Instablog

We present two DJIA charts for your consideration, with the familiar lines in place from past chart updates. First a daily view, then a weekly "big picture" view. The immediate long-established overhead resistance, in multiple time frames, which we've lately cautioned about is self-evident.

Click the charts for a larger version of each.

Note in the weekly chart that if you imagine the "2008 break-even" line (in red) extended further to the left, it would mark support for the last half of 2007.

For your convenience, we'll repeat here our recent daily Update commentary that refers to these technical levels :

The DJIA cleared the resistance range we'd identified, and now not far higher lies two key technical concerns. One is a 3-year uptrend which the market fell below in late July and has yet to rise back above. Two is long-term horizontal resistance crica 12800.

In late 2007 when the market began to break down from its multi-year highs, the October lows were 12724. After the breakdown, the November highs were 12931 with several weeks over the following few months peaking between 12750 and 12850.

After the market tanked in 2008, it returned to these levels only twice. Once was over the course of three weeks in April 2011, the highs for which were 12832, 12876 and 12781. The next time was two weeks in July 2011 at 12753 and 12751, after which the market tanked badly for months as everyone reading this surely still recalls vividly.

Obviously, that's an area that for whatever reason the market finds significant. We're surely not the only ones to notice this, though we're the only ones we know of that's reporting it. For this reason, we fear major selling should the market go any higher.

Anyone still holding BGU, now up 20% since our late-December Daily STI bull signal, absolutely must reduce or close that levered long position at this point, we believe.

We further suggest that those skittish about a downturn sell their GS shares or calls. The shares are up approximately 18% since our call, while the options are up over 200%.

Disclosure: I am long TZA, BGZ.