The DOW~{!/~}s open, high, low and close on Friday were 11500, 11500, 11374, and 11381, respectively. The DOW fell 197 points last week.  The high for the week was 11670, only 80 points shy of the multi-year resistance level of 11750.  The adjustments mentioned last week would have protected profits during the strong bearish move on Thursday and Friday. The DIA is sitting nicely inside the June 113/114/115/116 Call condor. At this juncture, since the original trades would have been adjusted into risk-free positions, it would be best to let time run its course.  We will re-examine last week's adjusted positions after the May options expire, as the DOW may find some support at 11335.

There may exist an opportunity for a bearish trade setup, as the DOW had two bearish price bars with lower highs, lower lows and lower closes. 11335 is a previous resistance level established by a recent pivot that may lend support.  A bearish trigger would be a break below 11335. The bearish target would then be 11039, a support level formed by the most recent pivot low. Should the DOW trigger the entry below 11335, the risk could be limited by using Friday~{!/~}s high of 11500 as the stop-loss.  These numbers would offer a reward-to-risk ratio (RRR)  of 1.79:1.  One could use various option strategies for such a potential move, such as a long put option, a long bear put spread and/or short bear call spread. Traders should avoid buying put options which are too OTM or with less than 30 days to expiration, and any option trades which have a reward-to-risk ratio of lower than 1.8:1, since the underlying trade set-up is 1.79:1.  Otherwise, trading the stock of the underlying may make more sense. As usual, do not allocate more than 2% of a portfolio on any single trade. IF the 11335 level manages to hold, the DOW will likely rebound and head for 11670--the recent high--likely encountering some resistance at 11560 (Aggressive Range Projector) on its way up.

Although both the (5,34) & (10,70) oscillators are still bullish, they have peaked near the previous Wave3 oscillator high. In addition, both oscillators are sloping down, making it likely that the bearish move may continue into next week.

The NASDAQ~{!/~}s open, high, low and close on Friday were 2264, 2264, 2243, and 2243, respectively. The NASDAQ lost 99 points last week, breaking through its first and second support levels in the process.  It is now sitting just above the third support level of 2241. Last week's WaveFinder suggested buying back the $MNX May 162.5/165/175/177.5 short iron condor spread for $0.25 or less, and traders could have done so from Monday to Wednesday, before the bearish breakdown.

A potential bearish trade could be constructed based on the current NASDAQ Daily chart. One can use 2241 as the bearish trigger, 2197 as the bearish target, and Friday~{!/~}s high of 2264 as the stop-loss.  Such a trade would yield a reward-to-risk ratio (RRR) of about 1.9:1.  Since there are no option chains available on the NASDAQ, suitable substitutes could be the QQQQ or the $MNX. QQQQ options are very liquid and have strike increments of $1, something that would allow a lot of flexibility to structure spreads, versus the $2.50 strike increments on the $MNX.  As with the DOW, one could employ such bearish strategies as a long put, a long bear put spread, or a short bear call spread, should the NASDAQ break below its current support level of 2241.  If the NASDAQ does find support at 2241, expect it to bounce back up to 2282 before heading back to 2299.  Should the NASDAQ manage to hold its ground above 2300, then it will likely re-test 2353, the most recent resistance pivot established just before the strong move down over the last two days.

Both the (5,34) and (10,70) oscillators are no longer bullish and are also sloping down, indicating that the downtrend may continue into next week. Also note that the oscillators have been diverging for quite some time, often a sign of the end of a bull run.