Following a little Thanksgiving intermission, traders were in no mood to continue their buying spree.   A declining dollar, civil unrest in Iraq, a valuation question of Google and poor sales results out of WalMart all provided good reasons for good old fashioned profit taking.  Ok, well it was a little more than just profit taking today as both the S&P and Dow broke their upward trend lines and will most likely test their 50 day moving average in the coming days.  If there is a silver lining it’s that volume, while heavier than Friday’s holiday trading, was just a bit above average.  In addition, the Nasdaq is holding the upward trend .. just barely.  Today’s move was certainly not surprising and the action up to this point remains healthy.

The Nasdaq stops just short of breaching that upward trend, but it would take a miracle for it to not bust through that level tomorrow.  Ultimately, I’d expect theNasdaq to test that 50 day moving average at around 2350.  How it does around that level would be a great indication just how much of a pull back/correction we’ll get up here.

The S&P wasn’t so lucky and broke its upward trend, making it likely it will test the next level of support in the area of 1350.

A similar story for the Dow and it too looks poised to test the next level of support around the 50 day moving average which happens to be around 12,000.