Updated Wednesday, 10/8 for Thursday's market. Key DOW Levels for 10/9 UP Above 9,625 DN Below 9,175
9,200 Reached.. Dow trades back and forth throughout session, closes near lows.
From prior commentary, "...The Dow looks quite ill at this point and could be headed even lower before a bottom is seen..." The Dow opened the day with early selling pressure this morning, but bounced sharply off 9,200 before rallying to 9,600, as seen in the 15 Minute Chart. The Dow then dropped back to 9,200 and rallied to 9,600 before closing the day just above 9,200 with a loss of 189 points. The index rallied and dropped consistently today, making 400 point swings look way too easy.
The Dow has now formed a clear consolidation range that could offer a solid breakout opportunity soon. Furthermore, the index has formed a clear two-touch upper trend line across the week's highs that could spark the next clear rally.
We will watch 9,200 and 9,600 for a solid breakout tomorrow. Such a breakout could spark the next 500 point move. An upside break through the 9,600 level could finally spark a fairly major rally back toward the 10,000 level. If Longs are taken above 9,600, prudent Fixed Profit stops should be used.
As usual, the Dow should continue to be considered highly bearish, despite any intermediate rallies that may occur.
Short Term Dow
The Dow closed the day within a clear trading range that spans from 9,200 to 9,600, seen in the 5 Minute Chart. Look for a breakout from this range for early direction at the Open.
Medium Term Dow
In the medium term, we are still out of the market and will watch 9,625 for Longs and 9,175 for Shorts. We will hold off on the 30 Minute Rule at the Open and will look to take profits of 200 points.
NASDAQ & S&P
The NASDAQ and S&P each traded back and forth throughout the session today, forming clear ranges. Watch these ranges for direction tomorrow.
Summary
The Dow ended the day near the lows of the session, as the index continually tested the 9,200 level today. Watch today's range for clear direction the rest of the week.
Thanks for listening, and Good luck in your trading!
Ed Downs edowns@nirvsys.com
|