Updated Tuesday, 9/9 for Wednesday's market.
Key DOW Levels for 9/10
UP Above 11,600
DN Below 11,000
Sharp Decline..
Dow reverses from resistance, drops over 345 points from highs.
From prior commentary, "...Watch for more near-term strength above 11,300, unless this level is crossed..."
The Dow opened the day with a nice burst of strength this morning, as the index raced out to a 60 point gain in the first 30 minutes of the session, as seen in the 15 Minute Chart. However, the Dow got a major reversal off clear resistance at 11,575, which pushed the index lower yesterday as well. This reversal sparked a major 345 point drop from highs and eventually led to a loss of 280 points.
The Dow has broken below the 11,300 level mentioned in yesterday's commentary, which could prove highly bearish heading into tomorrow's market. This break will likely cause another test of prior lows just above the 11,000 level. Look to 11,200 for additional signs of weakness. Otherwise, further sideways-to-up movement is likely to occur between 11,200 and 11,600.
Short Term Dow
The Dow closed the day with a big drop through the 11,300 level, seen in the 5 Minute Chart. Watch this level closely for early direction tomorrow morning.
Medium Term Dow
In the medium term, we entered the market Short at 11,300 today, but stopped out with a loss of 25 points. We are out of the market and will watch 11,600 and 11,000 down; using 25 point stops.
NASDAQ & S&P
The NASDAQ and S&P each sold off from early gains and pushed steadily lower throughout the session. Look for a potential continuation pattern to form ahead.
Summary
The Dow closed the day at the lows of the session with a big loss today after dropping from resistance and through 11,300. Look for a potential test of prior lows at around 11,000 soon.
Thanks for listening, and Good luck in your trading!
Ed Downs
edowns@nirvsys.com
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