Holding at 10,350
Dow trends higher for the day, closes beneath major 10,350 fulcrum.
From prior commentary, "...If the index can maintain its stance above 10,220, we could see another steady advance Monday, especially if 10,320 is solidly crossed..." The Dow opened the day with a steady rise this morning, but the advance was halted at the key 10,350 resistance level, as seen in the 60 Minute Chart. The index pulled back from the highs and then rallied back to the 10,350 level to end the day higher by 61 points.
The 10,350 level is clearly the point in the chart where we need to zone in on. As you'll recall, the Dow broke the 10,350 support level about two weeks ago, which led to the continuation of the recent overall decline. This level is now serving as a clear resistance level to a fuller recovery. If the index can break through, and hold above, the 10,350 level tomorrow, continued strength should be seen in the medium term.
However, a pull-back from this level will make for a possible decline tomorrow, especially if 10,295 is taken out. The 10,295 level served as intraday support throughout the session. A violation here will lead to a likely decline.
Short Term Dow
The Dow has formed a clear trend line beneath the lows of today's advance, seen in the 1 Minute Chart. Watch for strength above this line tomorrow morning, unless 10,340 is broken to the downside.
Medium Term Dow
In the medium term, we entered the market Long at 10,315 this morning, but stopped out of the trade at the entry due to the Breakeven Rule. We are still out of the market and will watch 10,365 up, and 10,290 down; using 20 point stops.
NASDAQ & S&P
The NASDAQ and S&P each closed the day at their respective highs for the session. However, each is dealing with their own resistance levels, which must be crossed in order for further strength to be seen.
Summary
The Dow ended the day at the highs of the session, but continues to hold beneath the key 10,350 resistance level. A solid upside break through this level could lead to a solid burst of strength tomorrow. Otherwise, a break at intraday support at 10,295 will indicate another wave of selling.
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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