This low remains key to protecting further downside, and as a result my long recommendation remains firmly intact.
It usually pays not to listen to the blather of the media when it comes to investment decisions. Their often desperate, commercial need to create headlines in a 24-hour news cycle promotes a tendency to exaggerate the mundane. Even if they are on the ball, the headlines are, by definition, historic and already priced-in. A good example of this is the prominence given to consumer and business sentiment surveys, which provide historic figures that are largely meaningless when looking to the future. It is the leading indicators that count, and these 'dull' numbers usually manage to go unnoticed by prime-time media. It is my understanding that the leading indicators in the US are painting a much rosier picture. This would place the future economic fundamentals and my technical analysis in positive alignment.
My ultimate target on the Dow, the tight alignment of percentages banding around 16,023-16,186, remains compelling. The recent 4.165% pull-back is just one of many we have witnessed in this great bull-market that began in March 2009. There will surely be more too. They all have one thing in common, however: the media has created negative news stories around them. To have been influenced by these headlines would have cost us dearly. Occasional pull-backs such as this are necessary, and can be seen as a healthy cleansing of periodic market exuberance.
Recommendation: Buy or stay long. Target 16,175. Stop-losses can remain unchanged and be applied only on momentum below 14,390.