Das Bärengebrüll wird schon wieder lauter,

Winding Up..

Dow trades back and forth at highs, winds up within newly-formed triangle pattern.

The Dow opened the day with early strength this morning, but fizzled above 12,800 yet again before ending the day with a modest gain of 43 points, as seen in the 15 Minute Chart. The index held above 12,650 and is now building out a clear triangle pattern around the 12,800 level, which we will continue to watch closely.

The 15 and 60 Minute Charts show the Dow continues to wind up at highs around the 12,800 level, which has been a huge problem for the index over the last four months. However, the fact that the Dow has actually held at these highs for four straight days is mildly bullish. The current triangle pattern that has formed over the last four days could spark a breakout move of about 250 points. Watch 12,850 and 12,700 for early signs of direction. A breakout could lead to new highs not seen since the first week of 2008, while a downside break could mean another drop back toward 12,500.

Short Term Dow

The Dow ended the day within a clear range from 12,700 to 12,800, seen in the 5 Minute Chart. Watch this range closely at the Open.

Medium Term Dow

In the medium term, we are still out of the market and will watch 12,850 up, and 12,700 down; using 25 point stops.

NASDAQ & S&P

The NASDAQ and S&P each traded back and forth throughout the session while developing clear ranges at highs. Look for more consolidation behavior before a breakout occurs.

Summary

The Dow continues to hold near overall highs, as the index remains above 12,650, but below 12,900. Watch the four-day triangle pattern for a potential breakout move tomorrow. Otherwise, more development should occur.

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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