The four primary US Stock indices have traded sharply lower and are at critical levels. The direction of the break from these levels will determine the bearish or bullish intermediate term outlook for potentially the remainder of 2012.
Below are weekly profile charts of the S&P (ES), Dow (YM), Russell 2000 (TF) and the Nasdaq 100 (ENQ).
S&P / ES
The S&P formed an HVN (High Volume Node) from April-June. The rally to the upside away from this HVN appears to be failing and the S&P closed Tuesday at the mid-point of this structure. A close below 1300 opens up the possibility of a sharp decline to 1250.
Dow / YM
Unless the Dow can regain 12792 it appears on its way to 11980-11731
Russell 2000 / TF
The divergence between the Russell and the other three indices proved to be the tell for the present decline, and the Russell is leading the way down. It won’t take much for the Russell to trade to 725 and if that level breaks it opens up the possibility of something like we saw in August 2011.
Nasdaq 100 / ENQ
The Nasdaq has held up relatively well. If it releases below 2508 the next critical level is all the way down to 2323 – 2280.