| Updated 1/15 for Friday's market. |  | ||||||||||||||||
Wide Range FormingDow hits resistance, stays within wide trading range.From prior commentary, "...the Dow appears to be forming a wide trading range at the highs of the major uptrend from 10,375 to 10,590. This will likely be the range that the Dow stays witin until the index can establish another medium term trend..." The Dow trended higher today, but was halted by the key 10,590 resistance level, seen in the 15 and 60 Minute Charts. The index pulled back off this level, essentially forming a wide trading range at the highs of the major uptrend from 10,375 to 10,590. As we noted yesterday, the Dow will likely stay within this range for quite some time until a solid break from the range occurs. The range looks to be early in its development, so we could be looking at another week or two before another medium term trend is established. A solid upside break through the top of the range and through the key 10,600 level will indicate another advance in the medium term, while a break of support at 10,375 will spark a sharp decline. Look for the index to push down off resistance tomorrow, leading to a move toward support at 10,375. Short Term Dow Short term, the Dow is holding beneath the clear 10,590 resistance level, seen in the 5 Minute Chart. Look for weakness below this level tomorrow morning. Medium Term Dow In the medium term, we closed Longs this morning at 10,522, giving us a breakeven trade. We then entered Shorts at 10,500, but stopped out with a 20 point loss. No other trades were triggered and we are now out of the market. We will watch 10,600 up, and 10,375 down, with 20 point stops. NASDAQ & S&P The NASDAQ and S&P each traded wildly within their respective trading ranges today, which we will continue to keep an eye on. Look for similar behavior within the range boundaries until direction is established. * Summary The Dow traded in volatile fashion today, but stayed below a clear resistance level of 10,590. The index has now formed a wide trading range, which will likely contain the Dow for a while. Look for similar volatility within the range boundaries until a solid break arises. 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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