Updated Wednesday, 10/22 for Thursday's market.
Key DOW Levels for 10/23
UP None
DN Below 8,300
Down 514..
Dow breaks consolidation to downside, drops steadily to the Close.
From prior commentary, "...The index basically dropped back to the bottom of the tightly-wound consolidation pattern at 9,000. A breakout form this three-day consolidation could spark the next 400 to 600 point move..."
The Dow opened the day with a big downside break through the bottom of the tight consolidation at 9,000 this morning and proceeded to drop 700 points before ending the day lower by 514 points, as seen in the 15 Minute Chart. The Dow dropped precisely to the lower boundary of the large triangle pattern, which we will continue to monitor for a potential breakout down the road.
The Daily and 60 Minute Charts show the Dow continues to wind up within the boundaries of the large, 2,240 point triangle pattern, which has continued to evolve over the last 2 1/2 weeks. Eventually, a breakout from this triangle could spark a major directional push in the index, which could be worth up to 2,240 points. Keep an eye on today's lows at 8,300 for signs of a downside break, and 9,300 for an upside break.
As usual, if the Dow remains above the lower boundary at 8,300, we will likely see more development within the range until a break occurs.
Short Term Dow
The Dow broke through 8,600 late in the day and dropped 300 points before bouncing 300 to the Close, ending the day at the 8,600 fulcrum, seen in the 5 Minute Chart. Watch this level closely for early direction.
Medium Term Dow
In the medium term, we entered the market Short at 8,975 this morning and closed the trade at 8,755 with a gain of 250 points. We are out of the market and will look for Shorts below 8,300; using 50 point stops. We will hold off on the 30 Minute Rule and the Breakeven Rule for this set-up.
NASDAQ & S&P
The NASDAQ and S&P each dropped sharply through the bottom of their respective consolidations and are now at the bottom of larger ranges. A break through these support levels could spark major selling pressure ahead.
Summary
The Dow closed the day much lower after breaking the tightly-wound consolidation pattern at 9,000 today. The index continues to build out within the large triangle pattern and could be on the verge of a big breakout soon.
Thanks for listening, and Good luck in your trading!
Ed Downs
edowns@nirvsys.com
|
Thread abonnieren
