As we tweeted beforehand today, the $DJIA was approaching critical resistance at the 11524 level (prior year low - turned resistance) and the index did not disappoint - hitting the level, going 4pts beyond and then selling off 180pts since then (see chart below).
This is the critical barrier it must pass as it was the first barrier it broke through to put the market into negative territory for the year, and has held a strong 900pt bounce on first attempt.
Note the 20ema is falling and making its way towards this level and since price has not posted a daily close above it since July 26th of this year, we feel this + the 11524 is the critical level to break to show the bulls are for real and that the losses were just a wound that has healed.
The rejection has been shallow it should be noted so if it approaches it again and encroaches up against this current resistance, we could be witnessing the markets seriousness about wanting to be long the $DJIA again but we suspect this is less likely.
For bears, wait for a retest of this level to sell again and for bulls, a daily close above the 20ema or back down at the yearly lows before posting longs again.