US Futures - spm3 daytrading

Consolidating

Dow pushes lower, consolidates at the lows. Watch boundaries Monday.

The Dow moved lower right from the Open this morning and pushed down to the major lower trend line at 9,150, seen in the Daily and 60 Minute Charts. The index spent the rest of the session consolidating at the lows right at the lower line. The index has formed a tight range at the lows from 9,140 to 9,200, seen in the 15 Minute Chart.

The index is right at a key decision point, as the Dow is currently holding at the major lower trend line. A break either way from the tight consolidation will indicate whether the index will rally back within the range or finally get a major downside break of the long term lower line.

Since the consolidation has formed at the lows of the current move, a downside break is the most likely scenario. Therefore, watch for a break at 9,140, as this level could lead to a much further retracement. Otherwise, an upside break from the range at 9,200 could send the index back up toward the 9,360 area of the wide range.

Short Term Dow

Short term, the Dow has formed a tight range from 9,140 to 9,200, seen in the 5 Minute Chart. Watch for a break from this range to indicate direction for Monday's Open.

Medium Term Dow

In the medium term, we entered the market Short this morning at 9,150, but covered the position for a 10 point loss. No other trades were triggered and we are now out of the market. We will watch the consolidation boundaries for Monday's market. Watch 9,135 down, and 9,200 up, with 10 point stops.

NASDAQ & S&P

The NASDAQ and S&P each mirrored the Dow today, as each pushed lower from the outset followed by the formation of a consolidation. The consolidation boundaries will be our main focus for Monday's Open. *

Summary

The Dow trended lower at the Open, then formed a tight consolidation at the lows, which we will watch carefully for Monday's market. A downside break will indicate a steeper retracement, while an upside break will push the index back into the wide trading range. Watch 9,135 down, and 9,200 up Monday.

Thanks for listening, and Good luck in your trading..

Ed Downs
edowns@nirvsys.com

with assistance from..
Frank Ochoa, 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