Late-Day Advance
Dow drags early, but rallies steadily to the Close.
From prior commentary, "...Continued overall weakness should be seen in the medium term until the Dow can break back above 11,100 with conviction. If the index can get a break back above 11,100, we could see some real strength enter the market...” The Dow opened the session in weak fashion this morning, but eventually turned higher from lows and rallied steadily to the Close, as seen in the 15 and 60 Minute Charts. The index closed the day with a solid 49 point gain and looks to have redrawn the boundaries of the large triangle as it continues to gear up for the next big breakout move.
The 60 Minute Chart shows the Dow continues build out within the boundaries of the large triangle range, which has been winding up throughout June. This leads us to believe that the beginning of July will be packed with big movement. That is, a breakout from this range could fuel a huge 2 week move in July.
Look for continued range movement within the range until 10,900 or 11,100 is solidly broken. A breakout in this range could yield a several hundred point move.
Short Term Dow
The Dow closed the day just beneath intraday resistance at 10,980, seen in the 5 Minute Chart. Watch this level for early direction tomorrow morning.
Medium Term Dow
In the medium term, we are still out of the market and will continue to watch 10,900 down and 11,100 up; using 20 point stops.
NASDAQ & S&P
The NASDAQ and S&P each pushed slowly lower throughout the session, but rallies solidly to the Close. Each index continues to wind up for the big breakout move.
Summary
The Dow ended the day with a nice bounce to the Close, but continues to wind up within the boundaries of the large triangle range, which will definitely pack some punch once a breakout occurs. Continue to watch 10,900 for another round of weakness.
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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