Major Follow-Through
Dow follows through to upside, tacks on another 132 points.
From prior commentary, "...given today's sharp and steady advance, we may see a period of 'rest' tomorrow, as the index form a continuation pattern. If the Dow can hold above 10,250, continued strength is likely..." The Dow opened the session in solid fashion today, as the index raced higher right from the opening bell, as seen in the 15 Minute Chart. The index traded sharply higher throughout the rest of the day, eventually breaking through key resistance at 10,400, seen in the Daily and 60 Minute Charts.
The fact that the index ended the day holding at the highs is promising of further strength. Look for the market to possibly pull-back from the highs tomorrow, as a consolidation range is established. Such a continuation pattern would make for another advance in the near term. If the Dow can continue holding above 10,400, more strength is likely.
Otherwise, a break below 10,400 will indicate a move back down toward 10,300. Watch this level for vulnerability.
Short Term Dow
Short term, the Dow has formed a tight consolidation at the highs of the 5 Minute Chart from 10,440 to 10,480. Watch for a break from this range for movement at the Open tomorrow morning.
Medium Term Dow
In the medium term, we are still Long the Dow from 10,275 and currently have 187 points in the trade. We will hold stops at 10,400 for tomorrow's market, and will want to stay Long above 10,500. We will hold off on Shorts, unless 10,200 is crossed to the downside; using 20 point stops.
NASDAQ & S&P
The NASDAQ and S&P each rallied steadily throughout the session and closed the day at the session's highs. Look for each index to hold gains tomorrow, possibly forming a continuation pattern.
Summary
The Dow ended the day at the highs of the session after rallying 132 points on the day. The index has broken through key resistance at 10,400 and will likely remain strong above this level. We may see the index form a consolidation at the highs at or near this level before another big move occurs.
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
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