DJIA: Boden ausgebildet

Range Bound

Dow stays within the range, now gearing up for a break.

The Dow pushed higher at the Open, put quickly reversed off the upper boundary of the wide trading range that has formed from 10,320 to 10,430, seen in the 15 and 60 Minute Charts. As mentioned in yesterday's commentary, the Dow turned up the heat within the trading range, increasing volatility throughout the session.

The Dow is gearing up for a solid break from the range, but the direction is still in the air. A downside break is the most likely scenario, since the range has formed at the lows of the recent decline. A downside break through the bottom of the range at 10,320 will spark a sharp decline.

However, the 60 Minute Chart argues that an upside break is very likely. Looking at this timeframe shows that the Dow has pulled back off the highs of the recent decline and is looking for another push higher. An upside break through the top of the range at 10,430 will make for a serious rally. Watch the boundaries closely tomorrow, as a break either way should provide a solid move.

Short Term Dow

Short term, the Dow has formed a clear trend line beneath the lows of the late-day advance, seen in the 1 Minute Chart. A downside break of the line at 10,390 will make for weakness tomorrow morning. Otherwise, look for strength above 10,390 at the Open.

Medium Term Dow

In the medium term, we covered Shorts this morning at 10,420, giving us a nice 70 point gain for the trade. No other trades were triggered and we are now out of the market. We will watch 10,320 down, and 10,440 up tomorrow; using 20 point stops.

NASDAQ & S&P

The NASDAQ trended lower today, while the S&P stayed within a fairly clear trading range. Watch for a break from the range for direction tomorrow. *

Summary

The Dow traded within the clear trading range boundaries throughout the session, making three clear passes within the boundaries. Look for continued sideways movement within the range until a clear and solid break occurs. A break from this range is likely to dazzle.

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