Late-Day "Decline"
Dow pushes higher at Open, but declines steadily to the Close.
From prior commentary, "... This trend line level intercepts with the upper wide range boundary that was broken yesterday at 10,440...A bounce would lead a move back to the prior highs at 10,485..." The Dow bounced off a key trend line early in the session today, which did indeed push the Dow back up to recent highs precisely at 10,485. However, the index reversed down right off resistance at this level, setting the stage for a steady decline the remainder of the day, as seen in the 15 and 60 Minute Charts.
Look for the index to continue trending lower toward key support at 10,300, especially if 10,400 is broken early Monday morning. It should be noted, however, that the Dow should continue to be regarded as bullish above 10,300. A break at this level will indicate weakness, while an upside push through 10,485 will signal strength Monday.
Short Term Dow
Short term, the Dow ended the day within the boundaries of a tight consolidation from 10,395 to 10,420, seen in the 1 and 5 Minute Charts. Look for a break from this range to determine short term direction Monday.
Medium Term Dow
In the medium term, we entered the Dow Long this morning at 10,485, but stopped out of the trade. We later entered the index Short from 10,430 and are still in the trade. We will hold stops at 10,440 entering Monday's market. We will look to stay Short below 10,385 and will look for Longs above 10,450; using 20 point stops.
NASDAQ & S&P
The NASDAQ held at the highs throughout the session today, while the S&P trended steadily lower to the Close. Each index is now holding within their respective ranges, which we will watch closely Monday. *
Summary
The Dow ended the day lower by 72 points, but continues to hold above the solid 10,300 support level. Look for the index to show strength above 10,450, and weakness below 10,400.
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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