Steady Decline..
Dow pushes steadily lower throughout session, holds at key 12,100.
From prior commentary, "...the 12,200 has remained solid in repelling the Dow from advancing further...if the index continues to honor this level, another test at 12,100 is likely..." The Dow opened the session with an early bout of selling this morning, which essentially lasted the entire day, as seen in the 15 and 60 Minute Charts. The index trailed lower to the Close and eventually closed the day at the key 12,100 zone with a 73 point loss.
The index continues to show a great deal of resistance at 12,200, which has led to another test of the key 12,100 fulcrum, which is plainly seen running through the charts since the last week of October. If the index can manage to maintain its stance above this zone, we could see another test of 12,200 soon. Otherwise, a break through 12,090 will indicate another likely test of the major 12,200 zone.
The Daily and 60 Minute Charts show the index continues to hold above the major lower trend line, which now crosses at 12,050. We will continue to watch this level for major directional movement.
Short Term Dow
The Dow closed the day beneath a clear upper trend line from the day's decline, seen in the 5 Minute Chart. Watch this line for direction at the Open.
Medium Term Dow
In the medium term, we closed out Longs in the market at 12,100 today, giving us a 25 point gain for the trade. We then entered Shorts at 12,100 and are still in the trade. We will continue to hold 20 point stops and will want to stay Short below 12,025. We will look for Longs above 12,200; using 20 point stops.
NASDAQ & S&P
The NASDAQ and S&P each fell from the day's highs today, but basically held firmly above key near-term support. Watch these support levels tomorrow.
Summary
The Dow ended the day precisely at the 12,100 level today after it steadily declined throughout the session. The index continues to pull-back from the 12,200 resistance level, which could cause a longer retracement, especially if 12,050 is violated.
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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