imported post
Its 10700 ! for now....
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Watch 10,700[/font] [font="Verdana, Arial, Helvetica, sans-serif"]
Dow sustains gains, rallies up to major 10,700 level.[/font] [font="Verdana, Arial, Helvetica, sans-serif"]
From prior commentary, "...If the Dow can continue holding above 10,600, we could see a test of the August highs at 10,720 in no time..." [/font] [font="Verdana, Arial, Helvetica, sans-serif"]
The Dow continued its upside momentum today above the 10,600 level, as the index edged to within 4 points of the major 10,700 resistance level, seen in the Daily and 60 Minute Charts. The index pushed slowly higher on light volume throughout the session and eventually closed the day up by 46 points. However, the index must now contend with 10,700. [/font]
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The Daily Chart shows the Dow bounced off 10,700 many times during the summer months and this is its first trip back to this zone since early September. If the Dow can clear this hurdle, we could be on our way to a nice Christmas rally back toward the year's highs. [/font]
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However, a breakout at this point may be premature. Look for the Dow to feel out the 10,700 level, possibly forming a consolidation at around this zone before establishing direction. More likely, we could see a re-test of the 10,600 level before an actual breakout through 10,700 is seen. [/font]
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As we've mentioned before, the Dow should be considered bullish above 10,500 in a longer term sense. However, a break back below 10,650 may introduce a bit of near-term weakness. [/font]
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Short Term Dow [/font]
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The Dow has formed a steep lower trend line beneath the lows of the today's advance, seen in the 5 Minute Chart. A break of this line at 10,680 will indicate early weakness Monday morning. [/font]
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Medium Term Dow [/font]
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In the medium term, we are still Long the Dow from 10,600 and currently have 85 points in the position. We will hold stops at the entry in hopes that the Dow will establish itself above this zone before potentially taking out 10,700. We will want to stay Long above 10,725 and will hold off on medium term Shorts at this time. [/font]
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NASDAQ & S&P [/font]
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The NASDAQ and S&P each held recent gains throughout the session, with the S&P actually tacking on additional points to the upside. Look for a potential continuation pattern to form to indicate continued strength. [/font]
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Summary [/font]
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The Dow closed the day at the highs of the session after pushing toward 10,700 the entire day. The index is now holding at this level, which represents strong resistance for the past five months. Watch for a possible continuation pattern to form before a breakout attempt is seen. [/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]
