The DJIA is sitting right at the 200 MA (23,749), so that's the first support level to watch. Next will be 23,500, which is roughly the Feb and March lows and is also the base of the bearish 3 month descending triangle formation. If that fails to hold that would open the way for more downside.
However, the other main indices don't look as bad. The S+P is also close to its 200 MA (2620), but would need to fall to 2575 to reach the base of its descending triangle.
The Nasdaq looks better and is well above its 200 MA. While it hasn't formed a descending triangle, it has formed a possible head + shoulders which is also bearish, but it needs to drop to 6850 before getting too worried (currently 7075).
The Russell looks the best and is still up near the 50 MA, and has formed a neutral triangle with a possible upward bias.
If the DJIA breaks support, watch the S+P. Depending on what happens with the S+P will determine whether to short or not. Broken support for the DJIA and S+P doesn't necessarily mean the beginning of a new bear market, more likely it's just a deeper correction within the longer term bull market. In that case going short would be a shorter term trade.
