| Updated 12/9 for Wednesday's market. |  | ||||||||||||||||
Double-Top at 10,000Dow hits 10,000, then reverses.From prior commentary, "...The Dow pushed solidly higher off the lower boundary of the wide trading range today, which forced an upside break from the consolidation...The upside break from the range implies continued strength..." The Dow opened the session higher this morning and made its way toward the 10,000 level. We hit 10,000 early in the session, but were not able to hold above the level. Instead, the Dow set up what would later become a double-top reversal to the downside, seen in the 15 Minute Chart, which led to a 42 point loss for the session. The fact that the Dow was not able to break through the 10,000 level hints at the likelihood of the index staging another move lower within the longer term uptrend, seen in the Daily Chart. The index may push lower within the trend and test the lower trend line at about 9,750. A downside break through 9,850 will increase the odds of such a move. Otherwise the index will likely continue to trade between the levels of 9,850 and 10,000 until a break from this range occurs. We realize this is a wide range to watch, but we could experience whipsaw activity if action is taken within the range, which is why we want to wait for a break of either boundary. Short Term Dow Short term, the Dow has formed a tight consolidation at the lows of the 5 Minute Chart from 9,917 to 9,935. An downside break is implied, but watch both boundaries for direction at the Open. Medium Term Dow In the medium term, we closed Longs today at 9,830, giving us a 33 point gain for the prior trade. We are now out of the market and will watch 9,840 down, and 10,000 up, with 20 point stops. NASDAQ & S&P The NASDAQ experienced a "Pop and Drop" today, while the S&P basically did likewise. Each index ended the day near session lows and will likely continue trending lower within their respective ranges. * Summary The Dow saw a double-top at 10,000 today, sparking a decline late in the session. The index is likely to continue trending lower toward the major lower trend line from the Daily Chart. A break at 9,850 will indicate continued weakness, while an upside break through 10,000 will spark another move higher. 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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