Dow Jones: MOntag "abwaerts" !

Downside Break

Dow breaks lower trend line, trends lower for triple-digit loss.

The Dow got the downside break of the clear lower trend line at 10,450 this morning, which sparked an extended move lower throughout the session, as seen in the 15 and 60 Minute Charts. The index trended lower the entire day, losing 136 points for the session, but further downside could be seen.

The Daily Chart shows the Dow has pulled back into the wide, sloping trading range. Look for the index to continue trending lower toward the lower boundary of the range at around 10,200. But first, we may see a continuation pattern form at the lows before another move occurs. Look for the Dow to consolidate at the lows while the index digests the current decline. An upside push through 10,400 will indicate strength.

Short Term Dow

Short term, the Dow has formed a clear trend line across the highs of the recent two-day decline, seen in the 5 Minute Chart. Look for continued weakness below this line, unless an upside break occurs at 10,370. Such a break will indicate strength at the Open.

Medium Term Dow

In the medium term, we entered the market Short today at 10,396, but stopped out of the trade at the entry due to the Breakeven Rule. We later re-entered Shorts at 10,347 and are still in the trade. We will continue to hold 20 point stops for the trade and will stay Short below 10,325. We will hold off on Longs unless 10,400 is crossed to the upside; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each broke patterns to the downside, sparking a sharp decline to the Close. Look for continuation patterns to form to indicate another push lower. *

Summary

The Dow broke the clear lower trend line to the downside at 10,450 today, fueling a sharp push lower throughout the session. The index will likely continue trending lower toward 10,200, especially if a continuation pattern forms. Strength will likely enter the market above 10,400.

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

Holding..

Dow holds at lows, but pushes lower to the Close..

The Dow traded sideways throughout the session today, forming a clear trading range at the lows of the 15 Minute Chart. A downside break from the range late in the day led to a decline of 47 points for the session, but a further decline may be in store.

The Dow continues to hold at the lows of the major decline that has occurred the last four sessions. A downside break from the range formed at the lows will likely fuel a continuation lower in the medium term. Watch 10,200 down, as a break here will spark such a move.

Otherwise, further sideways movement will likely occur between 10,200 and 10,350 before the trend continues or reverses. Likewise, an upside break through 10,350 will make for a likely retracement after the recent decline. Such a break could lead to a push toward 10,400.

Short Term Dow

Short term, the Dow formed a lower high beneath 10280 late in the session, seen in the 5 Minute Chart. This pattern is typically bearish and implies a likely push lower Monday morning.

Medium Term Dow

In the medium term, we covered Shorts at 10,320 today, giving us a breakeven trade. No other trades were triggered and we are now out of the market. We will watch 10,200 down, and 10,350 up; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each continued slowly lower today, continuing the day's downtrend. Look for the indexes to continue to exude weakness until the clear upper trend lines are solidly crossed. *

Summary

The Dow pushed slowly sideways throughout the session today, before finally getting a downside break. The index ended the day lower, but continues to hold with a wider range from 10,200 to 10,350. Look for volatility within this range until a solid break occurs.

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