Chaos has spread across Wall Street over the past week with the Bears pounding with every might bringing bloodshed especially to the financial sector.  Panic was evident across the markets and the Bulls ran to seek refuge with the Federal Reserve.

The emergency rescue plan developed by the U.S. government gave ample reason for the Bulls to charge back on Thursday and Friday.  However, the question remains: "Will this rescue plan be the ultimate savior of the U.S. economy?"  We have seen several attempts by the U.S. government to prop up the equities market but each move was proven to be short-lived. 

Perhaps, the recent ban on short selling financial stocks might help ease a bit of the strain on the financial sector.  But then again, that's just dealing with one side of the problem - the selling pressure.  The tough part remains: how will the investors and traders be convinced to buy financial stocks?  The key ingredient to increase buying interest in the market is obviously missing and thus, we see the bearishness to remain.

Meltdown Monday has caused all three indexes to hit its target levels and even worse, breaking major supports and hitting new lows.  However, it is not advisable to take short positions as Thursday's turn has plotted a new point of support which may indicate that a rally is coming.

Focusing on DJIA, the reversal move last Thursday and Friday puts a halt on the down trend.  Our forecast is a short-term up trend with sideways bias where the market will try to break the medium-term trend line.  A major resistance pegged at about 11,700.

Short-Term : Up with Sideways bias

Medium-Term : Down

Long-Term :  Down

Broader shares S&P 500 likewise broke its short-term down trend line and will try to make a rally to about 1,290 or move sideways.

Short-Term : Up with Sideways bias

Medium-Term : Down

Long-Term :  Down

NASDAQ's movement last Wednesday was a move we were much afraid of.  Breaking 2,150 level was the break of a descending triangle or a continuing double top if some would want to call it that way.  Though the reversal has pushed the index back into the pattern (a false break down), Friday's price action does not prove much bullishness.  It did not close that previous gap, though the possibility of it is there and it did not make a bullish close.  Breaking 2,150 anew is highly probable.

Short-Term : Sideways to Down

Medium-Term : Down

Long-Term : Down