Late-Day Decline
Dow holds steady through morning, but falls in the afternoon.
From prior commentary, "...Look for the index to either consolidate at the highs or form a higher low to indicate continued strength. A break back below 10,300 will indicate a sizeable pull-back..." The Dow opened the session in a holding pattern today, as the index basically held at the highs for much of the morning, as seen in the 15 Minute Chart. However, the index got a sharp pull-back later in the day, whereby the Dow dropped 100 points from the highs before settling down with just a 44 point loss.
The 15 and 60 Minute Charts show the Dow has now formed a clear trend line beneath the lows of the current five-day advance. This is a very clear line in the charts to watch for tomorrow's market. If the market can hold this line tomorrow, look for the index to make new highs as it continues to advance in the medium term. However, should the index break 10,300, rest assured that we may see another decline toward about 10,100.
Short Term Dow
Short term, the Dow held firmly at 10,300 today, marking this level as clear support. Watch for strength above this level tomorrow morning.
Medium Term Dow
In the medium term, we entered the market late in the day at 10,300, but stopped out for a loss. We are out of the market and will watch 10,300 down, and 10,425; using 20 point stops.
NASDAQ & S&P
The NASDAQ and S&P each pulled back from yesterday's highs, but continue to honor a clear lower trend line. Watch this line closely tomorrow.
Summary
The Dow ended the day with a small push higher at the Close and has now formed a clear trend line beneath the lows of the recent advance. Look for strength above this line tomorrow, unless 10,300 is crossed to the downside. Such a break will lead to a larger correction.
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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