9:00am (EST)

The bears continued with their assault on the bulls Wednesday and made a strong push towards the second wave of support after pushing the market lower by 1%.  Although there was a slight bounce off the bottom, the bears clearly have the momentum going into the last trading session of the week as the market is closed on Friday.

The Dow dropped 125 points, or 0.95%, to close at 13,074.  The blue-chips traded to a low of 13,020 but the bulls were able to hold 13,000 which has been strong support since late March.  A close below this level would bring 12,800-12,750 into the picture.  A close above 13,200 today would be bullish for next week.

The S&P 500 fell 14 points, or 1%, to settle at 1,398.96.  The index finished below the 1,400 level after testing a low of 1,394 which puts 1,375 back on the radar.  If the bulls can manage a 2-point bucket by the close we can at least say they held support although they will lose the week.

The Nasdaq gave back 45 points, or 1.5%, to end at 3,068.  Tech touched a low of 3,052 and we have been warning our subscribers to watch for a break below 3,050.  This level was tested 3 times a few weeks ago after the move past resistance and is now trying to hold as short-term support.  A close above 3,100 would provide temporary relief if the bulls can manage a 1% pop today but that might be asking a bit too much.

The Russell 2000 declined 14 points, or 1.7%, to finish at 820.  The index kissed 817 intraday and failed to hold 830 which is where the bulls need to finish at today.  The S&P Volatility Index ($VIX, 16.44, up 0.78) traded to a high of 17.74 which was enough for us to take notice.  Although the VIX failed to close above 17.50, we said to watch this area as a possible warning sign for a trend change.

The market is still in a “range” but is on the verge of another big move.  While this week’s action points to more bearishness, we are still waiting on confirmation.  The bulls have been here before and still have some unfinished business but today’s action should give us a better idea on if there will be a breakdown, or, another bounce off support.

Futures are showing another lower start and look like this:  Dow (-44); S&P 500 (-5), Nasdaq 100 (-2).  Subscribers, check the Members Area for the updates and be on the lookout for possible Profit Alerts today.