A Daily Swing Trade

- Dow violates 12,400, drops 307 points. The Daily and Weekly Charts show the Dow is clearly making a run toward the 12,000 level mentioned in yesterday's commentary. However, many weeks back we mentioned that if 12,800 were crossed, a real target of 11,100 could be reached, as calculated by the large triangle pattern (or diamond/head-and-shoulders patter) from the Daily and Weekly Charts. The Dow clearly seems ready to test 12,000, which 11,100 not far below.

- The NASDAQ and S&P each sold off today, but the tech-heavy index lagged behind the heavy selling of the Dow and S&P. Each index reached new lows within their respective downtrends and a consolidation may now form.

Summary

The Dow ended the day with a big loss, as the index sold off heavily throughout the day. The index has gotten a solid break below 12,500 and will likely test 12,000 next. Watch this zone for a near-term bounce.