Dow Jones: Round Trip

Round Trip

Dow rallies at Open, but sells off sharply to the Close.

The Dow moved sharply higher this morning, breaking the tight consolidation to the upside, which sparked a swift move to the top of the wide trading range at 10,100, seen in the 60 Minute Chart. However, the Dow was not able to hold on to the day's gains, as the index reversed sharply off the day's highs, setting the tone for a steep decline late in the day, seen in the 15 Minute Chart.

The Dow shed 31 points by the end of the day, ending the session near the lower boundary of the wide trading range. Look for the index to reach the lower boundary of the range at around 9,880 tomorrow, though we will likely see further volatility within the overall range, which spans from 9,880 to 10,100.

The Dow is very likely to continue trading within the range boundaries for quite some time, as it gears up for the next big move. A break from this consolidation will likely spark an extremely strong rally or decline, so watch it closely.

Short Term Dow

Short term, the Dow has formed a clear trend line across the highs of the late-day decline, seen in the 1 Minute Chart. Look for further weakness below this line, unless an upside break through 9,980 is seen.

Medium Term Dow

In the medium term, we entered the market Long this morning at 10,075, but stopped out of the trade for a 20 point loss. We are now out of the market and will watch 10,100 up, and 9,800 down; using 20 point stops.

NASDAQ & S&P

The S&P and NASDAQ each popped at the Open, but reversed sharply late in the day, finishing off a round trip session. Each index has formed a wide range, which will likely house several more days of volatility. *

Summary

The Dow ended the day lower after getting a sharp move down off the day's highs. The index is now pushing toward the lower boundary of the wide trading range, which we will watch for either a break or reversal tomorrow. Look for continued range movement tomorrow, unless one of the key boundaries is broken.

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