Steady Advance
Dow hits new highs, pushes slowly higher to the Close.
From prior commentary, "...the consolidation has formed above the major upper trend line, which the Dow has broken above just days ago. This behavior is very typical of a healthy market..." The Dow opened the session bullishly this morning, but it took the duration of the day for the index to actually tread higher for a 55 point gain, as seen in the 15 Minute Chart. The slow, steady advance continues to indicate that the Dow is quite bullish at this stage and could eventually break out into a full-fledged rally.
The Daily and 60 Minute Charts show the Dow continues to hold above the key upper trend line, which is quite healthy. If the Dow can continue holding above 10,475, continued overall strength is very likely. However, the index must break through the next key resistance level at 10,600, which it has held beneath for nearly two months. An upside break through this level could spark quite a continuation higher.
We will keep an eye on the steep lower trend line that has hugged the current 7-day uptrend, seen in the 15 Minute Chart. A break of this line will indicate near-term weakness. Keep an eye on 10,550 for signs of a pull-back tomorrow.
Short Term Dow
The Dow has formed a clear trend line beneath the lows of the last two sessions, seen in the 5 Minute Chart. A break of this line at 10,565 will make for weakness tomorrow morning.
Medium Term Dow
In the medium term, we entered the market Long at 10,564 and are still in the trade. We will continue holding stops at the entry for tomorrow's market and will want to stay Long above 10,600. We will hold off on Shorts, unless 10,475 is crossed to the downside; using 20 point stop.
NASDAQ & S&P
The NASDAQ and S&P each tacked on gains today, but continue to hold at the current highs. A breakout from the current range will likely spark another big move tomorrow.
Summary
The Dow closed the day near the highs of the session after trending steadily higher throughout the session. The index continues to hold strong above the major upper trend line, which continues to promise more strength. A break below 10,550 will indicate near-term weakness tomorrow, but the index should remain strong above 10,475.
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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