And the matador strikes a serious blow! The bull is grievously wounded but it's not ready to give in. Not just yet anyway. While the matador's sword plunged deep into the bull, it wasn't the killer blow. And if I'm right, the same can be said of this week's plunge in the Dow. It did some serious damage to the bullish technical picture but there should be one last hurrah before the next plunge strikes the bull dead.

What on earth am I going on about? Let's find out by looking at the charts beginning with the daily.

Daily Chart

We can see after the 17151 top on the 17th July, there was a period of accumulation and distribution as the market made up its mind on which direction would be next. That was decided in reasonably quick fashion a week later as price broke down.

I have drawn an uptrend line from the 5th February low along bottoms. We can see this move down on the 25th July closed at 16915 which was just below the trend line. That was the first ominous sign of things to come. A couple of days later price could no longer be contained and down it went.

The next bull busting event was taking out the previous swing low of 16805. We can see in the green highlighted circle that this is where price had a recent unsuccessful attempt breaking the uptrend line.

Breaking these two key support levels, the uptrend line and then the previous swing low, has brought out of lot of sellers that sell on stop. They sell the breakdown. As it stands today, those sellers would have been in profit pretty much from the get go. They would be sitting back this weekend thinking they are the bee's knees. Super smarties.

But surely it can't be that easy. I doubt it. Once the selling is washed out a decent bounce should occur that puts all these sellers in a paper loss position. Just to put them on edge and make them nervy. Some would succumb and dump their shorts. Just the market's intention!

So, where might this expected bounce rally to? I have added Fibonacci retracement levels of the move from top down to Friday's low to help answer this. Now keep in mind the selling may not be finished yet. However, I have added a Relative Strength Indicator (RSI) which is showing an extremely negative reading under 10 which suggests a bounce is due. So let's work with what we've got.

So we have, or will have shortly, a new swing low. We then need a new swing high before we can truly entertain thoughts of a new bear trend. On the first bear rally, price often makes a deep retracement to at least the 61.8% level and often to the 76.4% level. These levels currently stand at 16878 and 16982 respectively. Personally, I favour the 76.4% level.

I have also added Bollinger Bands and after the first swing low in a new bear market is made, price often rallies back to the middle band before resuming downwards. This middle band looks to be in between the 61.8% and 76.4% levels. Hmmm.

And once we have a new swing high in place, price coming back down and busting the new swing low will be the matador's killer blow to the bull.

Let's now take a quick look at the weekly chart.

Weekly Chart

Firstly, I have added a Moving Average Convergence Divergence (MACD) indicator which has well and truly confirmed the bearish crossover. The red line above the blue line augurs for lower prices going forward.

Also, the Parabolic Stop and Reverse (PSAR) indicator shows that price busted the dots to the downside. And it busted them with authority! Those dots are now at 17133 and declining every week. As long as those upside dots are not broken, the bears will continue to growl.

The lines I have added are moving averages with time periods of 14 (purple), 50 (blue), 100 (red) and 200 (black). They are all ordered as per the beautiful bull market that has been in force. However, if a bear market has now begun, which I believe so, these averages should eventually meet and cross over each other. So these averages could be looked at as potential price targets.

Now, if I could indulge myself briefly, what I would like to see happen is this coming week price rallies without breaking the past week's low or high. Price makes a positive inside weekly candle, ie/ the week's low is higher than the low of the previous week while the high is lower. Then the following week price rallies a touch more, say up to the 76.4% level, before reversing and beginning to plunge. Let's see if the market accommodates me and I get what I want!

Finally, I wanted to touch on what is the popular view and what is the contrarian view. I have been seeing and hearing a lot of talk that once this "correction" is over, price will then come back up and bust into new all time highs. This would then be the final high before the real plunge commences. I'm certainly hearing and reading about this scenario a lot more than I am about the final top being in place already and a big plunge is set to begin.

Put simply, the popular view is price corrects now before rallying to a final all time high later this year. The contrarian view is the final top is in and the big plunge is set to commence. As for my view, I'll go with the contrarian one!