[FONT=Verdana, Arial, Helvetica, sans-serif]Look out and be careful.. Looks like its not over yet.
1271 would be a 50% retracement Which is still healthy..
PS
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Steady Decline[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Dow sells off from yesterday's highs, closes with a 104 point loss.[/FONT]
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From prior commentary, "...the Dow isn't getting the major separation from the 11,050 level after breaking it to the upside days ago. This lack of follow-through could indicate a failure of the rally and a likely downside break...” [/FONT] [FONT=Verdana, Arial, Helvetica, sans-serif]
The Dow opened the session in weak fashion this morning, which filtered throughout the remainder of the session for a big 104 point loss, as seen in the 15 and 60 Minute Charts. The fact that the index held above 11,050 for so long was promising of continued overall strength. However, the fact that the index was never able to push forward and separate itself from this level hinted at today's decline. [/FONT]
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The Dow is now fussing with the 11,000 level, which could tell us whether we'll see another 200 point decline or another move back up toward 11,100. Look for the index to form a potential continuation pattern beneath 11,050 to indicate that further weakness is likely. If the index continues to hold beneath 11,050, we could see another sell-off back toward 10,900, and possibly further. [/FONT]
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On a shorter term note, the Dow should be considered bearish until it can get a solid upside break through 11,150. Even if the index gets a reaction rally back toward 11,000 tomorrow, true lasting strength won't be seen until 11,150 is confidently taken out. [/FONT]
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Short Term Dow [/FONT]
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The Dow closed the day within the boundaries of a tight consolidation from 10,975 to 11,025, seen in the 5 Minute Chart. A breakout from this range should clear the path for early direction tomorrow morning. [/FONT]
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Medium Term Dow [/FONT]
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In the medium term, we entered the market Short at 11,000 today and are still in the trade. We will continue to hold stops at 11,025 and will want to stay Short below 10,950. We will hold off on Longs, unless 11,150 is crossed to the upside; using 20 point stops. [/FONT]
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NASDAQ & S&P [/FONT]
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Again, the NASDAQ paved the way for today's direction, as the index really took a hit today. The NASDAQ and S&P are each holding at their respective lows. Look for a continuation pattern to form to indication continued weakness. [/FONT]
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Summary [/FONT]
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The Dow closed the day near the lows of the session after selling of sharply from yesterday's highs. The index is now holding at 11,000, which we will watch closely for either a break or bounce for the next move. At this time, the Dow should be considered bearish beneath 11,150. [/FONT]
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Thanks for listening, and Good luck in your trading! [/FONT]
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Ed Downs
edowns@nirvsys.com [/FONT]
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with assistance from..
Frank Ochoa, Sr. Market Analyst
fochoa@nirvsys.com [/FONT]
What is that about only suckers buy at the highs?
