By Colin Twiggs
February 28, 2007 1:00 a.m. ET (5:00 p.m. AEDT)
Occasionally we will issue a mid-week update when a significant
event occurs on one of the major indexes.
The Dow Jones Industrial average recorded a sharp fall, breaking below the recent trend channel and closing below the 100-day moving average. The bearish divergence on Twiggs Money Flow has been warning of profit-taking for some time. A secondary correction will be confirmed if the next rally fails to take out the previous high -- close to a certainty after the extended up-trend. This is not a good time to go bargain-hunting.
The primary trend remains up. The correction is likely to find support at the previous high of 11600, while a fall below 10700 would signal a primary trend reversal.
A correction on the Dow is likely to drag other equity markets down as well, regardless of their fundamentals.