Trading the U.S. stock indices during 2012 was not an easy task for some traders and 2013 may also pose challenges as the global economic outlook remains uncertain for growth.
Looking back, the Dow Jones Industrial Average had rallied from December 2011 up until May 2012 gaining 13.66 percent at 13,338 before seeing a corrective move to the downside and losing 9.77 percent in just 23 trading days.
But the Bulls stepped in to lift the index above the May high to then create the 2012 year high at 13,661 in October to once again see the second decline of the year losing another -8.71 percent in 28 days.
As the end of 2012 approaches the Dow Jones index has created a lower high and with just a few more trading days left it seems unlikely that we may see new highs.
What is of concern going into 2013 is a potential bearish sign, which may cause a challenge for the bulls if they fail to clear past 13,661.
A classic bearish head and shoulders pattern seems to suggest that further declines may be ahead. For this scenario to occur the Dow Jones will need to see a break below 12,471 to confirm we are heading lower.