DJI Chart

As you may see from the DJI chart above majority of the technical indicators are bearish by pointing to the possibility of further decline. By comparing the DJI index to the S&P 500 and Nasdaq 100 indexes I may see similar sentiment with difference that the Nasdaq 100 index is less oversold.

S&P 500 and Dow Jones Industrials have become heavily oversold during the last week. The DJI trading volume on Friday did beat all historical records. Even the technical analysis is more bearish, because of this high volume surges during the price decline and heavily oversold indexes, I would recommend monitoring chart on the intraday basis very closely. With such high volume, as a rule, comes strong reversal. On the S&P 500 and DJI the recent volume surges are much stronger than those that we saw in October and November of 2008 and all of them lead to reversal. I do not think that the recent high volume explosion is going to be an exception. We may see reversal and it could be tomorrow or it could be several days after. Taking into account the magnitude of this volume surges we may face very strong and sharp up move.