February 12th, 2010

Market Index Outlook

with Frank Ochoa

The Dow Jones Industrial Average has pushed quietly higher throughout the week after bouncing from recent lows at 9,835 last Friday. The index has been within a steady downtrend since topping out at 10,730 in January, but is currently in the midst of a cycle high within the current decline. That is, the Dow may be pushing higher within the downtrend ahead of the next potential sell-off. Looking for an opportunity to 'sell the rip' may prove profitable.

The Dow has found short term strength over the last few days, but is now approaching a major band of resistance from 10,230 to 10,315. And while the index has been quite bullish in the short term, it faces an uphill battle, as resistance looms above. If the index pushes through 10,200 look for signs of weakness to enter the market between 10,200-300. The Dow should continue to remain bearish in the medium term so long as it remains beneath the 10,300 fulcrum. Otherwise, strength through this zone could make for quite a recovery back toward 10,500.

If 10,300 does indeed hold, look for another round of key selling pressure that pushes price back toward prior lows at 9,835. A longer term view of the Dow puts the next area of visual support at 9,700, while a 38% Fibonacci Retracement of the July lows to the Janurary highs points to support at 9,740. Look for the Dow to push toward this zone of support over the next week, as the index resumes its four-week downtrend.

Good Luck in your trading.

Frank Ochoa • SignalWatch LIVE! Team • Nirvana Systems Inc.

Market Index Trading Levels for Week of 2/8/2010

Index	Upper Level	Lower Level	Notes

$DJI	10325	9835	Approaching 10,230 fulcrum
$COMP	2200	2100	Still below 2,200 resistance
$SPX	1105	1045	Still below 1,105 resistance.
$NDX	1790	1710	Still below 1,790 support