DOW Vorschau 01-09-2005

Late-Day Advance

Dow reverses from early lows, rallies to the Close.

The Dow opened the session with a steady decline this morning, but held above the critical 10,350 support level, seen in the 15 and 60 Minute Charts. The index then staged a sharp reversal from the lows and capped the session with a big rally late in the day, which ultimately allowed the Dow to close the day higher by 69 points.

As we mentioned before, the market as a whole looks uncertain right now. However, the potential for a rally is still there. The Daily Chart shows the Dow has maintained above the key lower trend line and is again looking to get a big upside reversal. Continue to watch the 10,500 level, as an upside break through this level could be the spark that sets off another run to major resistance at 10,725.

The 60 Minute Chart shows the Dow is holding at the top of a clear trading range that has formed from 10,350 to 10,485. The index may continue holding within the boundaries of this range before the next key move is seen. A break back below 10,425 will indicate weakness back toward support at 10,350.

Short Term Dow

The Dow closed the day above near-term resistance at 10,440, seen in the 5 Minute Chart. Watch for strength above this level tomorrow morning.

Medium Term Dow

In the medium term, we are still out of the market and will watch 10,500 up, and 10,350 down; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each re-gathered strength after early declines this morning and pushed sharply higher late in the day. Clear upper trend lines are now being violated, which may turn the current trend into an uptrend.

Summary

The Dow ended the day at the highs of the session after rallying late in the day. The index is now holding at the top of a clear trading range at 10,485, which we will want to watch early tomorrow. An upside push through the 10,500 level may spark another big move higher tomorrow; otherwise, look for another push down within the range.

Dow 15 Minute Chart

Dow 60 Minute Chart

Dow Daily Chart

Dow Weekly Chart