2010 new year celebration mood was dampened by a 120.46 points fall in the Dow Jones Industrial Average. A gravestone doji marked the high for 2009 on 29th Dec 2009 and was confirmed the next day by a tiny dragonfly doji that was formed just below the earlier doji. Any hope of a higher year end closing was dashed when these two indecivise candlesticks formation decided to invite the Bears to join their new year party.
The Bears party on new year eve has diminished the probability of the Bulls to retest the bold dark green major down trend resistance line located at the top right hand corner of the chart. This major down trend resistance line was projected from the Oct 2007 peak. It must be demolished to herald the continuation of the bull run into 2010.
With the 120.46 points drop on new year eve expect an imminent test of the immediate bold blue support trend line when market opens on 4th Jan 2010. Support failure here will plummet DJIA to the intersection of lower support boundary of the bold light green channel and the upper support boundary of the bold red triple support lines. The zone formed by the bold red triple support lines represent the first major Bulls defense embattlement against the Bear Raiders. Take note that there are other faint dotted projection lines plotted on the chart that I will not comment on unless the Bears capture this first bull defense zone.
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