After rallying 6% from August 27th to September 18th, the Dow has now fallen 6% since then to get right back to where it was at the end of August. Talk about a roller-coaster ride. The move lower this time around, though, has the Dow staring at its 200-day moving average for the first time since the last day of 2012. This morning the index touched up against its 200-day briefly before bouncing nicely to close up a bit on the day.
The 200-day moving average is seen as a long-term trend indicator. When the index is above its 200-day and the 200-day is rising, the market is in a long-term uptrend. Obviously a break below the 200-day would not be a positive sign for momentum traders, so the market's action over the next few days will be key.
