| Updated 9/8 for Thursday's market. |  | ||||||||||||||||
ConsolidatingDow pulls back slightly, forms clear consolidation at highs.From prior commentary, "...Look for continued strength above 10,300, unless a downside break occurs here. Such a break could lead to a push lower toward 10,200..." The Dow held above the 10,300 level throughout the session today, forming a clear range at the highs from 10,300 to 10,365, as seen in the 15 and 60 Minute Charts. The index pulled back from yesterday's highs today, losing 29 points for the day, but may be in for a much larger move tomorrow. There are several factors in the charts that hint that big movement is very near. First, the fact that the Dow has formed a large consolidation at the highs implies continued strength within the current uptrend. An upside break through the top of the range at 10,365 will make for a strong push higher, while a downside break at 10,300 will indicate a sharp decline. The second key pattern in the charts appears in the Weekly Chart. The Dow is hugging up against the clear upper trend line of the major channel at 10,350. A move away from this upper trend line is very likely to spark a solid medium-to-long term move. A downside break at 10,300 will likely spark a move back down within the channel. The 60 Minute Chart also shows the Dow is holding right at the upper trend line of a shorter term uptrending channel. A break at 10,300 will likely spark a pull-back to at least 10,200. We could see further sideways movement within the consolidation boundaries before a break either way occurs, but when a break does occur it is very likely to be solid. Short Term Dow Short term, we will focus keenly on the 10,300 level tomorrow, seen in the 5 Minute Chart. Watch for continued strength above this level, unless a downside break occurs. Medium Term Dow In the medium term, we are still Long the Dow from 10,215 and will continue to hold stops at 10,300. We will want to stay Long above 10,350 and will look for Shorts below 10,300; using 20 point stops. NASDAQ & S&P The NASDAQ and S&P each trade sideways, forming key ranges to watch for tomorrow's market. Watch for continued sideways movement, until a break occurs. * Summary The Dow ended the day lower today, but continues to hold above the key 10,300 level. Look for the index to continue trading sideways between 10,300 and 10,365 tomorrow before a key break either way occurs. Such a break will usher in a solid push in the direction of the break. 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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