Winding Up..
Dow trades back and forth, winds up within tightening range.
From prior commentary, "...if the Dow can manage to hold above 12,050 yet again, we could see another wave higher within the steep uptrend..." The Dow opened the session lower this morning, but quickly reversed from the lows and basically traded sideways the rest of the day, as seen in the 15 Minute Chart. The index closed the day with a negligible 4 point loss, but is now winding up within a clear triangle pattern that could spark movement tomorrow.
The 15 Minute Chart shows the Dow is winding up within a clear triangle consolidation that has formed over the last two sessions. A breakout in either direction from this pattern could spark an easy 100 point move for the day. Watch 12,120 for early signs of strength tomorrow, as an upside break from the triangle will make for another run at new highs for the index.
However, a a downside break from the triangle could do more damage. That is, a downside break could actually spark a larger retracement after the extended rally that we have seen over the last six weeks. Watch 12,075 for early weakness, but the 12,050 level must be cleared for confirmed weakness to be seen.
Short Term Dow
The Dow closed the day just above key intraday support at 12,080, seen in the 5 Minute Chart. Watch this zone for early direction tomorrow morning.
Medium Term Dow
In the medium term, the Dow barely triggered Shorts at 12,050 today, but stopped out with a loss. We are now out of the market and will watch 12,125 up, and 12,050 down; using 20 point stops.
NASDAQ & S&P
The NASDAQ and S&P each recouped the day's early losses and are now winding up within clear technical patterns. Watch for a breakout for the next key move.
Summary
The Dow closed the day flat in terms of points, but could be gearing up for a big move out of the clear triangle pattern. Watch this pattern for the next key directional move.
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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