The Bulls have tried their best to prop up the markets the past few days. We saw a trial climb last Tuesday but it proved futile with Wednesday's performance. The Bears are taking the duel with a big lead and with the current market scenario, the Bears are off to a home run!

The continuous spat of bad news has given full conviction for shorters to hold on to their positions. The primary concern for many investors is the usual climb of Crude Oil which is causing inflation fears. Furthermore, fresh mortgage-related issues press the markets down anew.

Mortgage giants Fannie (FNM) and Freddie (FRE) succumbed to the ever worsening condition of the housing market. Monday would be another tough battle for the Bulls as there was an announcement last Friday that the US Government would be shutting down mortgage lender IndyMac Bank Corp. (IMB).

All news point south and this is clearly confirmed with both the DJIA and the S&P500 breaking key support levels at 11,000 and 1,256, respectively. New support levels will be tested at 10,650 and 1,220. We expect both indexes to continue its free fall mode and not even try to touch resistance levels. Outlook is bearish from short to long term duration.

On the other hand, The NASDAQ remains strong by keeping itself above the 2,200 support level. Outlook remains bearish in the short term , sideways to bearish in the medium term, and with a sideways to an upward bias in the long term.