Updated Wednesday, 9/3 for Thursday's market. Key DOW Levels for 9/4 UP Above 11,800 DN Below 11,400
Beneath Fulcrum.. Dow reaches toward 11,400, trades mostly sideways at lows.
From prior commentary, "...This range basically resides within the developing channel that has continued to evolve over the last two months. Continue to watch 11,300 for a significant decline. Otherwise, more range movement is likely above this zone..." The Dow opened the day quietly this morning, as the index basically moved sideways in a 100 point range before dropping to within 15 points of the 11,400 level, seen in the 15 and 60 Minute Charts. The index continues to hold beneath the clear 11,550 fulcrum, which we will continue to watch closely tomorrow.
The Daily and 60 Minute Charts show the Dow continues to build out within the boundaries of the large channel that continues to develop. The lower line basically crossed right at the day's lows, which essentially caused a modest reversal from lows.
The Dow continues to hold beneath the 11,550 fulcrum, which has been a clear "line in the sand" for two weeks. An upside break through this zone will likely spark another 200 point move, while a downside bounce will lead to another round of selling. Watch 11,400 for additional selling pressure, and 11,550 for near-term strength.
Short Term Dow
The Dow closed the day beneath clear two-day support at 11,550, seen in the 5 Minute Chart. Watch this zone closely for directional movement tomorrow.
Medium Term Dow
In the medium term, we are still out of the market and will watch 11,800 up, and 11,400 down; using 25 point stops.
NASDAQ & S&P
The NASDAQ and S&P each bounced modestly from the week's lows, but continue to hold at the bottom of the recent decline. Watch support for tomorrow's market.
Summary
The Dow ended the day with a modest rise from the lower boundary of the large channel. Continue to watch the 11,400 level for major signs of direction ahead.
Thanks for listening, and Good luck in your trading!
Ed Downs edowns@nirvsys.com
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