Holding..
Dow trades sideways, holds at recent lows.
From prior commentary, "...given the fact that the Dow has sold off steadily throughout the week, we may see the index hold at the lows as it digests recent movement..." The Dow opened the session quietly this morning, as the index lingered within the boundaries of a tight range throughout the session, as seen in the 15 Minute Chart. The index continues to hold within 10,750 and 10,805, which we will watch closely for movement tomorrow.
Looking at the Daily and 60 Minute Charts shows the Dow continues to battle within the major lower trend line at around 10,750. This lower line has remained in tact for nearly two months, and a break or bounce could lead to a serious move. Watch 10,750 for a break tomorrow to indicate another major decline.
However, the Dow may be setting the stage for a key rally toward recent overall highs. The fact that the index is holding at the lower trend line, precisely at 38% Retracement at 10,750 indicates the potential for a rally. An upside push through the upper trend line at 10,815 could very well spark a swift and powerful rally right from the outset.
After several weeks of volatile trading in the Dow, we now have clear levels in the charts that could provide significant movement. Watch them closely tomorrow.
Short Term Dow
Short term, the Dow has formed a tight range late in the session from 10,785 to 10,805, seen in the 1 Minute Chart. Watch for a break from this range tomorrow morning for indications of short term direction.
Medium Term Dow
In the medium term, we covered Shorts at 10,800 today, giving us a 25 point loss for the trade. We are now out of the market, and will watch 10,820 up, and 10,750 down; using 20 point stops.
NASDAQ & S&P
The NASDAQ and S&P each remained relatively quiet today, with each basically trading within the boundaries of a clear trading range. The S&P looks poised to rally, as the index is breaking a clear upper trend line. We may begin to see strength off the lows in the NASDAQ, as it has basically reached the bottom of its major range.
Summary
The Dow closed the day at the top of the day's tight trading range, setting the stage for a possible rally tomorrow. A break from this range will likely fuel another key move. Watch 10,820 up, and 10,750 down for tomorrow's market.
Thanks for listening, and Good luck in your trading!
Ed Downs
edowns@nirvsys.com
with assistance from..
Frank Ochoa, Sr. Market Analyst
fochoa@nirvsys.com
** Note: We are now posting Index entries and exits in Real Time, through our new Intraday Index Alerts service. To learn more about the service, visit SignalWatch.com and select Intraday Alerts from the main navigation bar. - SW Team
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