| Updated 9/9 for Friday's market. |  | ||||||||||||||||
Head-and-Shoulders?Dow pulls back for the session, forms possible bearish pattern at highs.From prior commentary, "...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..." The Dow got the downside break through 10,300 this morning, which sparked a slow downtrend for the session worth 24 points for the session. However, the 15 Minute Chart shows the Dow may be gearing up for a sharper decline very soon. Looking at this timeframe shows the index may be forming a head-and-shoulders pattern at the highs of the recent uptrend, also seen in the 60 Minute Chart. This pattern is typically bearish and could unleash a sharp decline if the neckline (support) is crossed to the downside at 10,265 tomorrow. Otherwise, an upside break through a clear short term upper trend line at 10,315, seen in the 15 Minute Chart, could make for another near-term really toward the top of the range at 10,365. If this occurs, we'll see continued range movement between 10,265 and 10,365. Short Term Dow Short term, the Dow has formed a clear short term upper trend line across the highs of the 5 Minute Chart. An upside break through the line at 10,310 will make for strength at the Open. Medium Term Dow In the medium term, we closed out Longs today at 10,300, giving us an 85 point gain for the trade. We later entered Shorts at 10,300, but stopped out at the entry for a breakeven trade. We are out of the market and will watch 10,260 down, and 10,325 up tomorrow; using 20 point stops. NASDAQ & S&P The NASDAQ and S&P each traded sideways within their respective ranges today. Look for further range movement until a clear and solid break occurs. * Summary The Dow closed the session lower today, but is currently holding above a key support level at 10,265, which we will watch closely tomorrow. A break here will likely spark a sharp continuation lower tomorrow, while an upside break through 10,325 will indicate strength. 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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