Dow-Thread

Holding..

Dow trades back and forth at highs, forms key range beneath resistance.

The Dow opened the day with a burst of energy to begin the session, but the advanced was slowed by the solid 10,400 resistance level that formed in the 15 and 60 Minute Charts. The index closed the day slightly higher, but may be gearing up for a retracement, as the lower trend line will be tested Monday.

The 15 and 60 Minute Charts show the Dow continues to honor the lower trend line that has formed beneath the lows of the latest six-day advance. However, the Dow broke the line to the downside just before the Close, indicating that we may see further weakness Monday. Watch for a break below 10,325 for confirmation of additional weakness, especially if 10,300 is taken out shortly thereafter.

We will keep an eye on the 10,400 level for indications of strength next week, as a violation of this level will likely spark another swift move higher.

Short Term Dow

Short term, the Dow ended the day right at support at 10,340, seen in the 5 Minute Chart. Watch this level for direction at the Open Monday.

Medium Term Dow

In the medium term, we are still out of the market and will watch 10,400 up, and 10,300 down; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each popped at the Open, but weren't able to sustain gains. Look for each to continue holding at the highs until clear breaks occur.

Summary

The Dow closed the day at the session's lows, but netted a slight gain for the day. The index hit a clear resistance level at 10,400, which we will watch closely Monday. Look for continued range movement between 10,300 and 10,400 until this range is broken. Such a break should yield clear movement.

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

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