On Thursday U.S. stocks fell sharply lower, with the Dow Jones Industrial Average losing close to 300 points after two days of the bull run, as investors reacted to a surprise increase in weekly jobless claims and data that showed existing home sales at a 10-year low in June.

The Dow Jones Industrial Average fell 283 points, or 2.4%, to end at 11,349, with 26 of its 30 components finishing in the negative. It is the biggest drop since June 25 and lowest close since July 16. The Nasdaq fell 45.77 points or 2 percent to 2280.11, and the S&P 500, down 29.65 points, or 2.3 percent to 1252.54.

Washington Mutual Inc. was among the hardest hit, with shares of the nation’s largest thrift recently down 13%. The Seattle-based company, reported a quarterly loss of $3.33 billion on Tuesday, is now fallen by 32% by Thursday.

The blue-chip index laggards included General Motors Corp. tumbled 11%, Citigroup Inc down by 9.8% and Boeing Co off 6.3%.

A bearish reversal shooting star candlestick was spotted after Wednesday’s close on Citigroup, a conditional order was placed before Thursday’s open to buy Sept 20 Puts if stock is below $20.50 so as not to miss out on this opportunity should it begin to fall.

The order was filled at $1.87 and, the puts premium has swell to $2.43 with a profit of 30% at closing.

Looking at the current situations there are very good chances that the financials will continue to slide but to be on the safe side, a stop was placed at $ 1.90 to protect against any chances of losing my capital.

Economic data releasing on Friday includes durable goods orders, at 8:30 a.m. New home sales and consumer sentiment will be reporting at 10 a.m. Realtytrac is also expected to release new foreclosure data.

“The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements” - Jesse Livermore

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