Dow Jones: Neue Tiefs

Parocorp:

09.08.04 08:31

Updated 8/6 for Monday's market.

Key DOW Levels for 8/9
UP	Above 10,000
DN	Current Trend

Continuation

Dow continues steadily lower, drops 148 points.

From prior commentary, "...The fact that the Dow has broken the range to the downside implies a likely continuation lower in the medium term. Look for the index to hit key support at around 9,900. A break at this level will indicate movement toward the lower boundary of the wide, sloping range at around 9,500..."

The Dow opened the session sharply lower this morning, getting a key break of 9,900 right from the outset. The break sparked a slow, but steady drop throughout the session, as the index eventually closed the day lower by 148 points, as seen in the 15 and 60 Minute Charts.

The Daily Chart shows the Dow has formed a lower high within the overall downtrend. The index will likely continue to trend lower toward the lower boundary of the major channel at around 9,600. However, we could see the index form a continuation pattern before 9,600 is hit. Look for the index to consolidate at the lows before another key drop occurs. Continued weakness is very likely below 10,000.

Short Term Dow

Short term, the Dow ended the day near the session lows and is holding within the boundaries of a tight range, which has formed from 9,790 to 9,840, seen in the 1 Minute Chart. Watch for a break from this range to indicate initial direction Monday.

Medium Term Dow

In the medium term, we are still Short the Dow from 10,075 and will move our stops down to 9,915 for Monday's market. We will hold off on Longs, unless 10,000 is crossed to the upside; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each continued lower today after yesterday's sharp decline. Look for a continuation pattern to form to indicate continued weakness. *

Summary

The Dow closed the session sharply lower today, after getting a big break from a bearish pennant during yesterday's session. Look for a likely continuation lower toward 9,600 in the medium term, but a lower high or consolidation may first occur.

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

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Rules and Definitions

Dow 15 Minute Chart