Yesterday’s selloff moved the Dow below a fairly major level of support at 12,000. In all likelihood, this violation will lead to more selling in the days ahead. The technical picture sets up almost too perfectly. According to what we see, the next stop is in the vicinity of the March 14th & 17th closing prices of 11,951-11,972.

A bounce off those numbers and a rally back to around 12,200 wouldn’t be surprising to The Correct Call as many computer models will probably read “oversold.” We are on the lookout for a SHORT-term buy signal from our very reliable oversold indicator. Our subscribers and those who have registered with us should keep an eye on their inbox. If we get the green light, we will email all of you with what should be a nice quick trade. If you haven’t already done so, register now.

From there, if our analysis holds to form, the next leg would follow along the angle of decent to converge at the end of the “T” formation; meaning a visit to the March 10 closing low of 11,740 sometime near the end of June-early July.

If we have made The Correct Call, this is how we would suggest trading this forecast:

Wait for the buy signal for the bounce and then invest aggressive money only in ProShares Ultra Dow (DDM); which delivers 2 times the punch of the Dow. Ride DDM until the DJIA reaches 12,150-to-12,250 and then sell. Turn those proceeds around and buy the appropriately symbolic DOG, ProShares short Dow ETF or for hyper aggressive traders, DXD for double the downside action. Hold on to your DOG of choice until late June-to-early July.

As you can see on the chart, this all looks too straightforward: