Steady Rise
Dow reverses off lows, rallies steadily to the Close.
From prior commentary, "...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..." The Dow opened the session lower this morning, but reversed sharply off the lows, sparking a steady climb the remainder of the session, seen in the 15 and 60 Minute Charts. The Dow ended the day higher by 159 points and is now holding right at the upper boundary of the sloping trading range at 10,120, seen in the 60 Minute Chart.
Today's rally off the lows could spark the big upside reversal that we were looking for two weeks ago. The Daily Chart shows the Dow is still holding at the lower boundary of the wide, downward-sloping range. An upside push through 10,150 will likely make for a steady rise toward the upper boundary of the range at around 10,400.
The Dow could form a continuation pattern at the highs before another move is seen, however. Otherwise, a break back below 10,050 will likely make for continued volatility within the current trading range, which has formed from 9,925 to 10,120.
Short Term Dow
Short term, the Dow has formed a clear trend line beneath the lows of the day's rally, seen in the 5 Minute Chart. A downside break of the line at 10,080 will likely make for weakness 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 10,050 down, and 10,150 up tomorrow; using 20 point stops.
NASDAQ & S&P
The S&P and NASDAQ each rallied off the day's lows, making for a steady rise in the market. Look for a continuation pattern to form to indicate a likely upside follow-through. *
Summary
The Dow reversed off the day's lows, fueling a sharp and steady rally to the Close. Look for continued strength above 10,050 tomorrow, especially if 10,150 is crossed to the upside.
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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