Dow Jones: 10780er Marke für Bullen wichtig!

Late-Day Decline

Dow holds steady within wide range, but gets late-day tumble.

-SW Team

From prior commentary, "...Given the fact that the index has trended steadily higher for the better part of December indicates that we may see further sideways movement within this trading range as the index digests the recent run..."

The Dow traded slowly sideways throughout the session before deciding to drop to the Close, causing a decline of 29 points for the session, as seen in the 15 Minute Chart. The index continues to trade sideways within the wide trading range, which spans from 10,780 to 10,870. This range has served as a nice pattern to watch for the ultimate break and move, which we will continue to watch for.

Look for continued range movement within the boundaries of the range, until volume picks up and a break occurs. As mentioned before, an upside break is the most likely scenario, given that this pattern is a continuation pattern. However, a break either way should yield a solid move. Also, the fact that the index has not pulled back much while trended steadily higher could call for a rather sizeable retracement should 10,780 be violated.

Short Term Dow

Short term, the Dow took a late-day dive just before the Close. The index is approaching the key 10,800 level, which is serving as a support level, seen in the 5 Minute Chart. Watch this level closely for tomorrow's Open.

Medium Term Dow

In the medium term, we are still out of the market, since none of our levels were triggered. We will watch 10,870 up, and 10,780 down for tomorrow's market; using 20 point stops.

NASDAQ & S&P

The S&P and NASDAQ each traded quietly sideways today, holding within their respective ranges. Look for much of the same, until a clear break occurs.

Summary

The Dow remains within the boundaries of the wide trading range, which we will continue to watch for a clear break. Further range movement will likely persist, further defining the boundaries of the range. A break from this consolidation should make for a solid move in the direction of the break. Watch 10,870 up, and 10,780 down tomorrow.

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

Pop and Drop

Dow violates short term support.

The Dow opened higher this morning, trading in close proximity to the upper boundary of the trading range established over the last five trading sessions. Despite the strong open, the Dow failed to hold its gains and quickly closed the gap. As the session progressed, the Dow continued to show signs of weakness and eventually capitulated beneath support near 10,780. The weakness continued as the index closed near its intraday low.

Today's downside violation of the lower trading range boundary near 10,780 may be significant. This violation may be the catalysis to a decisive capitulation toward 10,650. Should the 10,650 level fail to act as support, the Dow could continue to fall toward 10,550 or lower.

However, in the face of recent volatility, a retracement back toward the violated support level near 10,780 may transpire before the downtrend resumes. Look for the Dow to trade in tight sideways consolidation as its digests the recent decline.

Short Term Dow

Short term, the Dow maintain a steady downtrend throughout today's session. Look for continued weakness beneath 10,740. A retracement above 10,740 could trigger a short term rally toward 10,780.

Medium Term Dow

In the medium term, we originally enter the Dow short with an entry at 10,780, but were promptly stopped out with a 20 point loss. Later, we re entered the market short based on the lower low rule at 10,758 and hold a current gain of 34 points. We will lower our stops to break even. We will look to remain short below 10,700. Conversely, we will consider a long position above 10,780.

NASDAQ & S&P

The S&P and NASDAQ both violated short term support and appear weak going into the New Year. Look for continued weakness.

Summary

The Dow has violated the lower boundary of the trading range established in late december. Today's weakness may trigger further selling toward 10,650.

Thanks for listening, and Good luck in your trading!

Ed Downs
edowns@nirvsys.com

with assistance from..
C.E. Andrews, Market Analyst
candrews@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