Sloping Range
Dow rallies at Open, but sells off to the Close.
From prior commentary, "...look for the index to continue to slosh around within the sloping range boundaries of 9,900 and 10,100. Remember, a break from this range will likely spark a swift and powerful move. Watch it closely..." The Dow rose sharply at the Open this morning, but immediately began to sell-off, sparking a day-long downtrend, seen in the 15 Minute Chart. The Dow ended the day slightly lower, but may be gearing up for an even greater move lower, as the bearish consolidation continues to develop, seen in the 60 Minute Chart.
The index continues to trade sideways within the boundaries of the sloping range, which we are watching very closely for a break. A downside break from the range at 9,900 will likely spark a sharp decline in the medium term, one that could span 500 points. Conversely, an upside break through 10,120 could fuel an equally powerful move to the upside. Look for continued sideways movement until one of the boundaries is violated.
Short Term Dow
Short term, the Dow ended the day within the boundaries of a tight range from 9,940 to 9,980, seen in the 5 Minute Chart. Watch for a break from this range for direction at the Open.
Medium Term Dow
In the medium term, we are still out of the market, since none of our entry levels were triggered. We will watch 9,900 down, and 10,120 up tomorrow; using 20 point stops.
NASDAQ & S&P
The S&P and NASDAQ each rallied at the Open, followed by weakness in the afternoon. Look for continued range movement tomorrow, until a solid break occurs. *
Summary
The Dow sold off the session highs, ending the day near the lower boundary of the major trading range. Look for the index to continue trading within the range boundaries until a break of either the upper or lower boundary occurs. Such a break will likely fuel a rather sizeable move in the direction of the break.
Thanks for listening, and Good luck in your trading..
Ed Downs
edowns@nirvsys.com
with assistance from..
Frank Ochoa, 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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