▶ TTT-Team: Mittwoch, 07.02.2007

Consolidating..

Dow trades sideways throughout session, builds out clear range.

The Dow traded most sideways yet again today, as the index has built out a clear four-day consolidation that spans only 65 points, as seen in the 15 Minute Chart. The index closed the day with a 5 point gain, but is clearly gearing up for a big breakout from this consolidation pattern.

The 15 and 60 Minute Charts show the consolidation has formed at the overall highs and above the major 12,600 resistance level, which is quite bullish. The fact that the Dow has been able to hold above the 12,600 level for four straight days is also bullish. Watch 12,685 closely for strength tomorrow, but watch 12,700 for a confirmed breakout move.

Given that the Dow has yet to really pull away from 12,600 level indicates that the index could still be vulnerable to a pull-back. Watch 12,620 for signs of weakness tomorrow. Watch 12,600 for key selling pressure.

Short Term Dow

The Dow closed the day beneath the 12,680 resistance level, seen in the 5 Minute Chart. Watch this zone for early directional movement.

Medium Term Dow

In the medium term, we are still Long the Dow from 12,550 and currently have 116 points in the move. We will hold stops at 12,620 and will want to stay Long above 12,700. We will watch 12,620 for Shorts; using 20 point stops.

NASDAQ & S&P

The NASDAQ led the market lower to begin the day, but eventually rebounded to the Close. The S&P continues to build out a clear range that will surely factor into direction.

Summary

The Dow continues to build out within the boundaries of the clear rectangle consolidation, which could spark the next big move. Watch 12,620 and 12,685 for early direction.

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