Still Holding..
Dow continues holding at highs, now close to breakout from consolidation.
From prior commentary, "...The Dow continues to hold at the overall highs within the boundaries of a tight consolidation. Look for continued range movement ahead of the next key breakout move from this range..." The Dow traded back and forth throughout the session today, but remained within the boundaries of the tight consolidation, as seen in the 15 and 60 Minute Charts. The index closed the day at the top of the pattern with a 7 point gain, and looks close to breaking out.
The consolidation has formed at the overall highs after rallying steadily for the better part of 5 weeks, which is highly bullish. An upside break from this pattern tomorrow at 12,150 could spark another easy 100 point move to the upside. Watch this zone closely.
While a downside break through 12,075 could make for weakness tomorrow, the index will need to get a convincing break through the major lower trend line at around 12,050 for major weakness to be seen. Continued overall strength should be seen above the lower trend line until this line can be solidly crossed and held.
Short Term Dow
The Dow closed the day beneath intraday resistance at 12,150, seen in the 5 Minute Chart. Watch this zone closely for key direction tomorrow morning.
Medium Term Dow
In the medium term, we are still Long the Dow from 12,050 and currently have an 85 point gain in the trade. We will continue to hold stops at 12,050 and will want to stay Long above 12,150. We will hold off on Shorts, unless 12,050 is crossed; using 20 point stops.
NASDAQ & S&P
The NASDAQ continues to wind up within a large triangle pattern, while the S&P continues to push higher. Look for continued overall strength, unless support is violated.
Summary
The Dow continues to trade within the boundaries of a clear consolidation that should spark the next key move. Watch the boundaries of this pattern for big movement.
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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