Dow-Thread

Updated Thursday, 5/12 for Friday's market. Key DOW Levels for 5/13UPAbove 10,325DNBelow 10,175Sharp DeclineDow breaks consolidation to downside, drops steadily lower.From prior commentary, "...The immediate pull-back from the 10,200 is promising of continued overall strength, especially if 10,400 is solidly broken. However, we may see further range movement between 10,200 and 10,400 before a break either way is seen..." The Dow opened the session relatively volatile, but held within the boundaries of a clear consolidation throughout much of the morning, as seen in the 15 and 60 Minute Charts. The Dow eventually broke the consolidation to the downside, sparking a very fierce decline worth about 111 points. After yesterday's strong reversal at 10,200, the Dow seemed poised to continue pushing higher in the medium term. However, the Dow now finds itself back at the major 10,200 level, which we will watch closely for movement tomorrow. Given the fact that the index has formed a lower high after reaching 10,400 last week does not bode well for near-term strength. Watch support closely at about 10,180, as a break or bounce off this level will indicate initial direction tomorrow. The Weekly Chart shows a pattern of behavior that is not at all favorable. This chart shows that the Dow may be giving us the 'Kiss of Death' pattern, whereby the index rallies and touches a broken trend line from underneath before turning back down and dropping in big fashion. However, this pattern will not kick into high gear until 10,000 is crossed to the downside. Short Term Dow Short term, the Dow ended the day at the lows of the session, forming a range from 10,180 to 10,210, seen in the 1 Minute Chart. Watch for a break from this range for short term direction at the Open. Medium Term Dow In the medium term, we entered the market Short at 10,200 today, but barely stopped out for a loss. We later re-entered Shorts at 10,187 and are still in the trade. We will continue to hold 20 point stops and will want to stay Short below 10,175. We will hold off on Longs, unless 10,325 is crossed to the upside; using 20 point stops. NASDAQ & S&P The NASDAQ and S&P each broke their respective consolidations to the downside today, sparking weakness to the Close. Watch support for movement tomorrow. Summary The Dow closed the day at the lows of the session and is currently holding at support at 10,180. Watch for a break or bounce at this level for an indication of direction tomorrow. The index continues to trade in quite a volatile fashion, as much of the range has been contained within the boundaries of 10,000 and 10,400. We may see a rebound tomorrow, but lasting strength is not likely until 10,325 is crossed to the upside. Thanks for listening, and Good luck in your trading! Ed Downsedowns@nirvsys.com with assistance from..Frank Ochoa, Sr. Market Analystfochoa@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 _________________________ Rules and DefinitionsDow 15 Minute ChartDow 60 Minute ChartDow Daily ChartDow Weekly Chart

Updated Thursday, 5/12 for Friday's market.

Key DOW Levels for 5/13 UP Above 10,325 DN Below 10,175 Sharp Decline Dow breaks consolidation to downside, drops steadily lower. From prior commentary, "...The immediate pull-back from the 10,200 is promising of continued overall strength, especially if 10,400 is solidly broken. However, we may see further range movement between 10,200 and 10,400 before a break either way is seen..." The Dow opened the session relatively volatile, but held within the boundaries of a clear consolidation throughout much of the morning, as seen in the 15 and 60 Minute Charts. The Dow eventually broke the consolidation to the downside, sparking a very fierce decline worth about 111 points. After yesterday's strong reversal at 10,200, the Dow seemed poised to continue pushing higher in the medium term. However, the Dow now finds itself back at the major 10,200 level, which we will watch closely for movement tomorrow. Given the fact that the index has formed a lower high after reaching 10,400 last week does not bode well for near-term strength. Watch support closely at about 10,180, as a break or bounce off this level will indicate initial direction tomorrow. The Weekly Chart shows a pattern of behavior that is not at all favorable. This chart shows that the Dow may be giving us the 'Kiss of Death' pattern, whereby the index rallies and touches a broken trend line from underneath before turning back down and dropping in big fashion. However, this pattern will not kick into high gear until 10,000 is crossed to the downside. Short Term Dow Short term, the Dow ended the day at the lows of the session, forming a range from 10,180 to 10,210, seen in the 1 Minute Chart. Watch for a break from this range for short term direction at the Open. Medium Term Dow In the medium term, we entered the market Short at 10,200 today, but barely stopped out for a loss. We later re-entered Shorts at 10,187 and are still in the trade. We will continue to hold 20 point stops and will want to stay Short below 10,175. We will hold off on Longs, unless 10,325 is crossed to the upside; using 20 point stops. NASDAQ & S&P The NASDAQ and S&P each broke their respective consolidations to the downside today, sparking weakness to the Close. Watch support for movement tomorrow. Summary The Dow closed the day at the lows of the session and is currently holding at support at 10,180. Watch for a break or bounce at this level for an indication of direction tomorrow. The index continues to trade in quite a volatile fashion, as much of the range has been contained within the boundaries of 10,000 and 10,400. We may see a rebound tomorrow, but lasting strength is not likely until 10,325 is crossed to the upside. Thanks for listening, and Good luck in your trading! Ed Downs edowns@nirvsys.com with assistance from.. Frank Ochoa, Sr. 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 _________________________ Rules and Definitions

Dow 15 Minute Chart Dow 60 Minute Chart Dow Daily Chart Dow Weekly Chart

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Nvidia Corp. (NVDA.O: Quote, Profile, Research), a maker of graphics microchips used in computers and game systems, could also help. Its shares rose over 5 percent after the bell on Thursday, after its quarterly net income tripled and topped estimates.

S&P 500 futures were up 1.4 points on Friday, trading slightly above fair value, Dow Jones industrial average futures were up 9 points, while Nasdaq 100 were up 4.5 points.

"There were decent numbers out of Dell," said Barry Ritholtz, chief market strategist at the Maxim Group, although he cautioned against drawing broad conclusions about tech demand from the company. "Dell's a unique animal, there's no one out there comparable to them. ... It appears that Dell has been an ongoing market share winner at the expense of their competitors."

Among economic news, the University of Michigan releases its May preliminary consumer sentiment index at 9.45 a.m. Economists in a Reuters survey expect a median reading of 88.0, compared with 87.7 in the final April report. Also due are data on import-export prices for April and business inventories for March.

In company news, auto parts supplier Delphi Corp. (DPH.N: Quote, Profile, Research) posted a quarterly net loss driven by production cuts at former parent General Motors Corp. (GM.N: Quote, Profile, Research) and its inability to record a deferred tax benefit.

Microsoft Corp. (MSFT.O: Quote, Profile, Research), the world's largest software maker, unveiled its new Xbox 360 on Thursday, taking aim at Sony Corp. (6758.T: Quote, Profile, Research) in the video game console market with a machine sporting high-definition graphics and features that make it an entertainment hub for the living room.

U.S. stocks fell on Thursday as oil prices slid to a three-month low and hit shares of major energy companies like Exxon Mobil (XOM.N: Quote, Profile, Research), while Wal-Mart Stores Inc.'s (WMT.N: Quote, Profile, Research) profit disappointed. On Thursday, the Dow Jones industrial average slid 110.77 points, or 1.08 percent, to close at 10,189.48. The Standard & Poor's 500 Index fell 11.75 points, or 1.00 percent, to finish at 1,159.36. The technology-laced Nasdaq Composite Index was down 7.67 points, or 0.39 percent, at 1,963.88.

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