| Updated Monday, 5/2 for Tuesday's market. |  | ||||||||||||||
ConsolidationDow remains strong, trading near resistance.From prior commentary, "...Until the Dow breaks the confines of the recently established trading range, we may see continued consolidation in the near term...." The Dow opened today's session strongly, in close proximity to the upper boundary of the wide trading range seen in the 15 and 60 minute charts. Despite a mid-session retracement, the Dow rallied to close near intraday highs. While the Dow closed near intraday highs, the overall outlook remains the same. The Dow continues to trade within the context of the wide trading range seen in the 15 and 60 minute charts. However, the fact that the index is consolidating near the established upper boundary suggest an upside break may be imminent. In addition, the Dow is also trading in close proximity to the downward sloping trendline seen in the 60 minute and daily charts. An upside violation of this descending trendline could mark a bullish change in trend. Hence, a decisive break above 10,260 could trigger a strong rally toward 10,380 and higher. However, if the Dow is unable to penetrate above the upper boundary of the wide trading range, we may see a sharp reversal back toward the lower trading range boundary near 10,050. Further weakness below 10,050 could bring about a profound capitulation beneath 10,000. Until the Dow breaks the confines of the recently established trading range, we may see continued consolidation in the near term. Short Term Dow Short term, the Dow has formed a tight intraday trading range as seen in the 5 and 15 minute charts. Look for a long position above 10,260. Conversely, look for a short position below 10,190. Medium Term Dow In the medium term, we are out of the market and will watch 10,260 up and 10,050 down; using 20 point stops. NASDAQ & S&P The NASDAQ and S&P both remained in a relatively tight trading range today. The indexes appear to consolidating for a future decisive move. Summary While the Dow continues to trade within the framework of the current wide trading range, today's intraday consolidation may provide a catalyst for a future up move. However, the overall bias will remain unclear until the Dow decisively traded outside the established trading range. Thanks for listening, and Good luck in your trading! Ed Downs with assistance from.. ** 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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