Dow Jones: Chart und Sentiment f. Mittwoch 07.01.

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Updated 1/6 for Wednesday's market.

Key DOW Levels for 1/7
UP	Above 10,560
DN	Below 10,500

Consolidating

Dow trades sideways at highs, forms tight range.

From prior commentary, "...Once again, the Dow has managed to stay within the steep uptrend, as illustrated by the clear channel...Look for a consolidation to form at the highs tomorrow, as markets typically form continuation patterns while digesting the prior rally..."

The Dow pulled back slightly to begin the session this morning, as the index proceeded to traded sideways throughout the remainder of the session, seen in the 15 Minute Chart.

The fact that the index has formed a tight range at the highs indicates a building strength, which could make for further upside movement within the steep uptrend, seen in the 60 Minute Chart. If the index can break and hold above 10,560, we could see such strength.

Otherwise, a downside break from the consolidation at 10,500 will likely signal another push lower within the channel, while a break below 10,450 will indicate an even further decline.

Short Term Dow

Short term, the Dow has formed a clear trend line beneath the lows of the 1 Minute Chart. A downside break of the line at 10,535 will likely spark weakness for tomorrow's Open.

Medium Term Dow

In the medium term, we barely closed Longs this morning at 10,502, as our stop was hit within just 2 points. This resulted in a breakeven trade for the position and we are now out of the market. We will watch 10,560 up, and 10,500 down, with 20 point stops tomorrow.

NASDAQ & S&P

The NASDAQ and S&P each pushed slowly, but steadily higher throughout the session today. Look for a continued upward push unless the lower trend lines are crossed tomorrow. *

Summary

The Dow traded sideways the entire session today, forming a tight range at the highs of the yesterday's upmove. This type of behavior typically indicates continued strength; watch 10,560 for a break to spark such strength. A break below 10,500 could fuel weakness.

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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Rules and Definitions

Dow 15 Minute Chart