► Day-Trading: Freitag, den 06.10.2006

Holding..

Dow holds throughout the session, maintains the week's big gains.

The Dow traded sideways at the highs throughout the session today and eventually pushed to a modest 16 point gain late in the afternoon, as seen in the 15 Minute Chart. The index continues to set successive all-time closing highs, but continues to look over-extended in the near term.

The index has rallied over 200 points in the last few days and 400 points since last week alone, which is quite a run in such a short period of time. Typically, a market must re-energize itself ahead of the next key move. That is, we could see either a pull-back or consolidation form at the highs before another directional move is seen.

The fact that the index held above 11,800 today indicates that the Dow remains quite strong. If the index can form a continuation pattern above this level, we could see another mad dash at new highs soon.

However, a downside break through 11,800 will be the first spark to a pull-back that could extend at least 100 points from the current levels. Watch this zone closely. The Dow should remain very bullish above the 11,650 zone in the medium to longer term horizons, however.

Short Term Dow

The Dow has formed a clear trend line beneath the lows of the 5 Minute Chart. A downside break of this line at 11,850 could spark big movement to begin the day tomorrow.

Medium Term Dow

In the medium term, we are still Long the Dow from 11,775 and currently have 89 points in the trade. We will move our stops up to 11,800 tomorrow and will want to stay Long above 11,900. We will look for Shorts below 11,800; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each continue to push higher within the current uptrend, but may be over-extended in the near-term. Look for a period of consolidation to occur at the highs before another key move is seen.

Summary

The Dow closed the day with another gain to extend the all-time closing highs for the third straight session. The index looks to be in a holding pattern at this point, however, as it looks to regain its momentum. Watch the 11,800 level as the next key fulcrum for medium term direction.

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