| Updated 9/27 for Tuesday's market. |  | ||||||||||||||
Downside BreakDow breaks bearish consolidation to downside, trends lower to the Close.From prior commentary, "...The fact that the consolidation has formed at the recent lows implies further weakness in the medium term. A downside break from the consolidation at 10,030 will likely make for another steep decline..." The Dow got the downside break from the bearish consolidation early in the session today, ultimately sparking a 59 point decline to the Close, as seen in the 15 and 60 Minute Charts. The fact that the Dow broke the range to the downside implies continue weakness in the near term. However, the Dow has sold off heavily in the last four days of trading. Typically, markets do not tend to trade in one direction without getting a pull-back or two along the way. Look for the index to pull back off the lows, possibly getting a reaction rally in the process. Further weakness is very likely in the medium term, but the formation of another continuation pattern will help the cause. Short Term Dow Short term, the Dow broke a clear short term support level at 10,000 late in the session, seen in the 5 Minute Chart. Look for weakness below this level tomorrow. Use 10,000 as a fulcrum for tomorrow's Open. Medium Term Dow In the medium term, we are still Short the Dow from 10,165 and will move our stops down to 10,050, locking in 115 points in the current trade. We will hold off on additional Shorts at this point, and will look to enter Longs above 10,050; using 20 point stops. NASDAQ & S&P The NASDAQ and S&P each broke their respective consolidations to the downside today, sparking a general downtrend for the session. Look for continued weakness overall, with a possibility of a reaction rally. * Summary The Dow closed the session lower today, after getting a key downside break from the bearish consolidation. Look for continued weakness in the medium term, especially if the index continues to hold beneath the major 10,000 level. An upside break through 10,050 could offer strength, otherwise, expect a continued decline. 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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