| Updated 8/12 for Friday's market. |  | ||||||||||||||||
Downside BreakDow breaks sloping pennant to downside, trends lower.From prior commentary, "...The index is now forming a clear, upward-sloping consolidation at the lows of the recent decline. Typically, this type of consolidation breaks to the downside, therefore we will watch the lower boundary of the range at 9,850 for a downside break to indicate weakness..." The Dow opened the session lower today and got the downside break from the sloping consolidation at 9,850, sparking a triple-digit decline to the Close, as seen in the 15 and 60 Minute Charts. The fact that the index has gotten a downside break from the bearish pennant implies a likely continuation lower in the medium term. Look for the index to continue trending down toward 9,600. However, the index must get a break through support at 9,800 if further weakness is to occur. We could continue to trade within the boundaries of 9,800 and 9,950 before another big move occurs. Such movement would indicate the formation of an even larger trading range. Watch 9,800 closely tomorrow. Short Term Dow Short term, the Dow has formed a tight range at the lows of the 1 Minute Chart from 9,809 to 9,855.Watch for a break from this range for direction tomorrow morning. Medium Term Dow In the medium term, we entered the market Short this morning at 9,850, but stopped out for a loss. We later re-entered Shorts at 9,839, but stopped out for a breakeven trade. We are out of the market and will watch 9,800 down, and 9,900 up; using 20 point stops. NASDAQ & S&P The NASDAQ and S&P each trended lower today, getting downside breaks from their respective ranges. Look for continued downtrending activity in the medium term. * Summary The Dow ended the day lower by 124 points today, but further weakness may lie ahead. A downside break through 9,800 will indicate continued weakness in the medium term. Otherwise, look for continued range movement between 9,800 and 9,950. 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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