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A review of the major indices shows that we are at critical support levels across the board. Notice that we are not only at support of major moving averages but also testing support of important trend lines. Both the S&P 500 and the Dow Jones Industrial Average are toying with support of both their intermediate and long term trend lines (Long term trend bold black line. Intermediate trend line dashed). If the market is to head higher from here, it is likely that we will undercut these key support levels before the next move higher. However, the possibility now exists that we could set a lower low on each of the major indices, which could place us in the midst of at least a short term trend reversal. We are looking to exercise caution under the current conditions.

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