Sideways Day
Dow drops, trades sideways to the Close.
From prior commentary, "...the index continues to trade within the boundaries of the wide triangle consolidation. As we mentioned yesterday, we will likely see continued volatility within the range until a decisive break from the consolidation occurs..." The Dow opened the session higher this morning, but like the past couple of sessions, immediately turned down and moved sharply lower for much of the morning, as seen in the 15 Minute Chart. After the steep morning drop, the Dow went on consolidate at the lows just above the lower trend line of the major channel, seen in the Daily and 60 Minute Charts.
The 15 Minute Chart shows that the index has trended lower the past several sessions within the boundaries of a tight channel. Typically, this behavior indicates that an upside break is looming. An upside break through the top of the tight channel at 9,100 will likely send the Dow back up toward the top of the wide trading range at around the 9,250 area.
A break through the top of the trading range at 9,250 will likely spark another solid move higher within the wide channel, seen in the Daily Chart. Conversely, a downside break from the range at 9,025 will likely lead to a sharp descent. Watch for further trading range activity until one of these levels is violated.
Short Term Dow
Short term, the Dow has formed a tight consolidation at the lows of the 5 Minute Chart from 9,050 to 9,100. Watch for a break from this range to indicate direction for tomorrow's Open.
Medium Term Dow
In the medium term, we are still out of the market, as none of our levels were triggered. We will continue to watch 9,025 down, and will also watch 9,250 up, with 10 point stops.
NASDAQ & S&P
The NASDAQ got another Pop and Drop today, while the S&P did likewise. Each index trended lower and then sideways, forming tight consolidations at the lows. Watch for further movement within their respective wide trading ranges. *
Summary
The Dow pushed lower after another seemingly strong Open today, as the index ended the day within the boundaries of a tight consolidation near the lows of the session. An upside break through 9,100 will likely send the index higher toward the top of the range, but significant movement will not occur until either 9,250 or 9,025 is broken.
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
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