Defending the Dow at 12,000

So far Dow bulls have successfully defended the Dow 12,000 level (shown here as a solid yellow line) as a benchmark for maintaining a semblance of the stock market showing some signs of recovery. The stock market has been on a fairly stead downtrend since the unemployment report showed an increase two weeks ago. Thus far, the daily chart (not shown) has shown closes above the 12000 level. However, if the Dow closes below 12000, and then confirms within the next day or two by moving below the daily low price of the day that closed below Dow 12000, stronger selling in the stock markets will likely ensue. In addition, the S&P 500 index futures have closed below the important 1340 level twice within the past week, but just barely. Each time, prices have moved above that level and closed there the following day. These two levels -- the Dow at 12,000 and the S&P 500 at 1,340 -- are both key technical levels to watch closely.