Replies to post #347465 on Zeev's Turnips Patch-No Politics (ZEEV)

[Train Guy]

Late-Day Decline
Dow breaks intraday range to downside, drops steadily to the Close.

From prior commentary, "...Look for the index to form a continuation pattern to indicate continued strength into tomorrow's market. If the index can hold above 10,550, additional strength is likely. Otherwise, a break back below 10,550 could lead to another decline..."

The Dow pulled back slightly from yesterday's highs to begin the session today, but generally held within the boundaries of a tight range throughout the day, as seen in the 15 and 60 Minute Charts. However, the index got a downside break from the intraday range at 10,580, which sparked a steep decline to the Close, resulting in an 89 points for the day.



The index ultimately closed below 10,550, and could head back down toward the bottom of the volatile, expanding trading range, which continues to develop at the lows of the 60 Minute Chart. A downside push through 10,500 could make for a very steep decline in the coming days.



We will likely see further volatility within the boundaries of the range (10,500 and 10,625) before a solid break occurs. An upside break through the clear upper trend line at 10,625 will likely spark another sharp advance for the Dow, but this is not likely given the current trading activity of the index.

Short Term Dow

Short term, the Dow broke a clear support level at 10,580 late in the day, which helped to spark the steep decline, seen in the 5 Minute Chart. Watch for continued overall weakness below this line tomorrow morning.

Medium Term Dow

In the medium term, we closed Longs at 10,600 today, giving us a breakeven trade. We are now out of the market, and will watch 10,500 down, and 10,625 up; using 20 point stops.

NASDAQ & S&P

The S&P mirrored the Dow throughout the day; while the NASDAQ led the broader market lower due to its weakness. The late-day does not bode well for tomorrow's market.

Summary

The Dow held on to much of yesterday's gains to begin the session, but late-day selling nixed the idea of continued strength. We will now keep an eye on 10,500, as a downside break through this level should make for another steep decline in the Dow. True, lasting strength will not enter the market, unless 10,625 is crossed to the upside.

Thanks for listening, and Good luck in your trading!

Ed Downs

http://www.signalwatch.com/markets/markets-dow.asp