Dow Jones: Chart-Update

Consolidating

Dow trades lower, holds at low within clear range.

From prior commentary, "...The index held firmly at key support at 10,300, but is still vulnerable for a break tomorrow. Look for the index to continue holding at the lows within the boundaries of the intraday range formed from 10,275 to 10,350..."

The Dow traded lower today, losing another 51 points for the session. The index, however, continues to hold within the boundaries of a developing consolidation, which has formed from 10,265 to 10,350, seen in the 15 and 60 Minute Charts.

The Dow ended the day below the key 10,300 fulcrum, which alongside the consolidation implies a likely downside break in the near future. A downside push through 10,250 will likely make for another sharp decline, while an upside move through 10,325 could offer a temporary pull-back within the downtrend.

Look for continued sideways movement within the consolidation boundaries before a break either way occurs. Such could be the case while the index digests recent movement.

Short Term Dow

Short term, the Dow is holding within a tight range from 10,265 to 10,300, seen in the 5 Minute Chart. Look for a break from this range for short term direction.

Medium Term Dow

In the medium term, we entered the market Short today at 10,269, but stopped out of the position. We are out of the market and will watch 10,250 down, and 10,325 up; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each trailed lower today, but formed clear consolidations to watch for next week's market. Look for continued sideways movement until a clear break occurs. *

Summary

The Dow is holding at the lows of the recent decline within the boundaries of a clear consolidation. Look for continued sideways movement at the lows until direction is established by way of a break. A downside break is the most likely scenario and could mark the beginning of a new major downtrend. Watch 10,250 down, and 10,325 up Tuesday.

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