Dow Jones: Charttechnisch? Niemandsland !

Downside Break

Dow breaks consolidation to downside, trends lower to the Close.

The Dow opened the session sideways this morning, as the index continued to develop the consolidation formed at the lows of the 15 Minute Chart. Later in the morning, the Dow got the downside break from the consolidation, sparking a spark decline the remainder of the session, worth 108 points.

The Daily Chart shows the Dow has dropped hard the past two days after getting the break through the clear lower trend line at 10,025. The Weekly Chart shows we could see a continuation lower toward the major lower trend line of the wide channel at about 9,700.

However, we may see the index get a pull-back before another drop occurs. An upside break through the short term upper trend line at 9,920 could make for a near-term rally or the formation of another continuation pattern at the lows. A break below 9,870 will make for further weakness.

Short Term Dow

Short term, the Dow has formed a clear upper trend line across the highs of the two-day decline, seen in the 5 Minute Chart. Watch for further weakness below the line tomorrow morning, unless an upside break occurs through 9,915.

Medium Term Dow

In the medium term, we are still Short the Dow from 10,015 and currently have a profit of 119 points in the trade. We will move our stops down to 9,950 and will want to stay Short below 9,870. We will look to enter Longs above 9,950; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each got downside breaks from their respective consolidations today, with the S&P taking a bigger hit to the downside. Each ended the day at the session lows; look for another continuation pattern to develop. *

Summary

The Dow got the downside break from the bearish consolidation this morning, sparking another steep decline. The index may make a medium term push back down to the major lower trend line at about 9,700, but we may see a continuation pattern develop first. Watch for a lower high or a consolidation to form to indicate further weakness.

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