Updated Tuesday, 9/2 for Wednesday's market. Key DOW Levels for 9/3 UP Above 11,800 DN Below 11,300
Major Pop & Drop.. Dow rallies 240 points at Open, but finishes lower on the day.
From prior commentary, "...The Dow has essentially been rejected at the 11,700 level for the second time in three weeks...If this level cannot be crossed, we could see another drop back toward the 11,400 level..." The Dow opened the day with early strength through the 11,700 level this morning, but quickly reversed from highs and proceeded to drop over 315 points from highs over the course of the day, as seen in the 15 and 60 Minute Charts. The index ended the day lower by 27 points and continues to build out within the ever-evolving channel.
The Daily Chart shows the Dow continues to build out within a rather large range from 11,300 to 11,800. 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.
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 early direction tomorrow.
Medium Term Dow
In the medium term, we are still out of the market and will watch 11,800 up, and 11,300 down; using 25 point stops.
NASDAQ & S&P
The NASDAQ and S&P each dropped sharply from early highs, making for a highly bearish conclusion to the day. Look for more overall weakness should the indexes remain beneath support.
Summary
The Dow closed the day near the lows of the session and selling off sharply throughout the day. The index continues to build out within a large channel, which we will continue to watch for September direction.
Thanks for listening, and Good luck in your trading!
Ed Downs edowns@nirvsys.com
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