Serious Technical Breakdown

DJ Resistance:  17,350,54   All-time record high
                             17,279.94 All-time closing high
                             17,152      Breakout point
                             17,015
                             16,755      Positive 1year trend line broken
                             16,588      Strong 2013 peak, 200 days MA
                             16,463      Light but important

DJ Support:        16,273.64 Strong Tuesday's low
                             16,015      Very strong

Technical Analysis:
What a reverse!
The damage caused by the downdraft movement is very serious and severe for DJIA, S&P and NASDAQ Composite indexes. The DJIA is the weakest right now.
Technically, I could read a correction considering the breakdown of the 200 days moving average, the 2013 peak at DJ16,588 and the 16 months positive trend line (watch 1 year daily chart) but the very strong support at DJ16,015 is still in play.
To stabilize DJIA, it needs to come over DJ16,588 and stay over it.
I don't expect a bounce up and get a market recovery. The damage shows that the market is reversing and buyers were battled by sellers in the technical levels (please watch volume). I conclude that the market is pointing to the downside and needs the buyers come back to confront the sellers. We are in a war right now and we are going to be witness of several battles.

The third quarter earnings season is going to drive the market direction, not the figures but the investor's interpretation of them.
The risk is to the downside but long term bull market is still in place.

Please click over the chart to enlarge it.

Fundamentals:
U.S.A. economy is recovering, not doubt about it. I will name some arguments to support the recovery which is positive for U.S. equities:
-GDP is growing over 2% and seems stronger.
-Bank lending is loose for corporations and individuals.
-Interest rates are low, the ten years bond interest rates has decreased from 3% p.a. at the beginning of the year to 2.4% p.a.
-Oil prices are coming down, gas prices should decrease then individuals will have more buying power.
-Labor market shows slow but constantly improvements.
-Household balance sheet are becoming better. Rising equities and house prices help them.
The confrontation comes from the European Union weak GDP, unemployment, austerity. Lower  Germany's GDP expectations. The Chinese GDP below 7%. The India and emerging markets weakness like Brazil.
I think that all these arguments have triggered the stock market downdraft movement besides the geopolitical events. Geopolitical is playing hard in the markets.
Dear traders and investors, it seems that the market is not going to stabilize in few days, instead we are going to have volatile movements. This volatility is dangerous because the risk is to the downside. Please, apply the discipline and stay stick with your plan. It is very easy to lose money with this kind of volatility.
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!

Ulises