Dow in Decline - Market Analysis for Feb 23rd, 2007

The Dow Diamonds Trust (AMEX: DIA) appears to have flipped around to the most sluggish of the major equity market ETFs, from its prior position as leader during the bulk of the July advance. Be that as it may, let's notice that the weakness started one week ago after the peak at 127.90, and has stair-stepped to the downside towards a confrontation with the nearest-term support line (Dec-Feb), now at 126.00. A break of 126.00 should trigger downside acceleration towards 124.00, but more importantly will provide strong technical evidence that the DIA in fact is in the grasp of a significant correction. Having said that of all the above, as long as 126.00 contains current weakness, all we have is a minor decline that has traversed the bullish price channel -- which means that the bulls remain in directional control.