Recapping the highlights of the previous week:

• Top executives at American International Group Inc (NYSE: AIG) knew of potential problems in credit default swaps, long before questions about the risky transactions caused its stock to plunge. Oh no! Caught red-handed!
• Cisco Systems (Nasdaq: CSCO) won’t cutback despite concerns of lower demand for tech products. Take that, non-believer!
• Steve Jobs didn’t have anything new to show to his loyal Mac followers, only added features to existing products. Ran out of ideas?
• J.P. Morgan (NYSE: JPM) warns their earnings will drop by 84%. They should’ve taken the opportunity to buy Morgan Stanley (NYSE: MS) to become J.P. Morgan Stanley.
• Citigroup (NYSE: C) loses $2.8 billion. Have they checked with Wachovia Bank? Maybe it’s there.

In what has got to be one of the wildest weeks of trading, the DJIA manages to finish the week higher. However, it still ended the week on a low note.

This is one week where both the bulls and the bears don’t know if they’re coming or going into the index. One moment it’s extremely negative, and then after a few hours, it’s substantially positive. Go figure.

If we take a look at the weekly chart of DJIA, we’ll notice that the previous week was the worst in the past decade, at the very least. The selling pressure for that week was so significant that the bar was quite long that this week’s trading is nothing more than an inside bar, meaning that it might succumb to more selling pressure in the coming weeks. In fact, it’s so bad that the MACD fast line just fell into a ravine.

On the daily chart, it doesn’t show the DJIA settling down anytime soon. It’s so volatile that a 500 to 800 point trading range is becoming a common phenomenon on a daily basis. In fact, many investors are not shocked anymore to see this kind of volatility. They’ve become apathetic and have just decided to let things settle before they even make a move.

At this point, we can only speculate that the market could be starting to consolidate. The problem is, it’s very hard to see through all this instability to make a firm call. When in doubt, don’t make a move.

Recommendation: Stay liquid.

Resistance: 10,260

Support: 8,170