The US market was devastated yesterday. Big Daddy Dow was down 266 points (2.19%) to close substantially below the 12,000 barrier at 11,867. The other members of the family were not spared either in the massacre. NASDAQ drop 75 ponts (2.75%) to close at 2,669 and S&P500 shed 33 points (2.56%) to close at 1,254.

More importantly than the actual falling numbers could be the story told by the charts.

Looking at the Dow Jones Industrial chart, yesterday’s 266 points drop broke the up going trendline (depicted in pink). This signifies a possible change in market direction which is confirmed by joining the 2 recent highs. We believe the short-term trend of the Dow Jones Industrial for now will be reflected by the blue channel instead (which is a downtrend).

Very similar to Dow, the 33 points drop in S&P500 broke the trendline too. We believe the ...