Love from Spain.Updated Tuesday, 6/12 for Wednesday's Market
Key DOW Levels for 6/13
UP Through 11,000
DN Through 10,800
Wide Range Established
The Dow is just below 11,000. Watch the level for break or
bounce.
From yesterday's commentary, "In the very short term, I
think you have to watch 10,900. If we drop through, it's a
pretty good bet we are going much lower.... we are short
at 11,000 because that is an important level and it was
violated. Now, we will see if the trading range is going
to stay intact..."
Today was interesting. We dropped through 10,900 right
away, which put us Short in the Short Term. In our
Intraday Alerts, we discussed the ramifications of dropping
through 10,800, but this level held up well and the index
then suddenly took off to gain back 150 points to the
close. This behavior created a very wide range from 10,800
to 11,000.
It is interesting that the NASDAQ repelled off 2,100 and
the OEX off 640, pushing up to the "magic" 650 level before
retreating at the end of the session. There are some
powerful dynamics at play here.
My assessment? I wouldn't get too excited about today's
closing rally. If you look at the Daily Chart, you can see
that we are forming a consolidation with a flat underside.
IF we can get through 11,000 tomorrow and hold, that will
be a reasonably good sign that the market is going on to
higher levels. Below 11,000 is scarey.
Short Term Dow
In the very short term, we are moving up and watching
10,950 for resolution below the 11,000 level. If we go
through 10,950 at the Open, I'd go with it and hold stops
at the same level. Through 10,925 down, you have to get
short.
Medium Term Dow
We are still Short, and watching to see if the market is
going to cross the 11,000 barrier going the other way. If
it does, we will exit our Shorts for a breakeven trade
(which would be the second in a row) and go Long. I am
very serious about using 11,000 as a fulcrum here. We
have traded more than I would like to in the medium term,
but we are at a critical level (11,000) and the market
should decide on direction soon. If we form a protracted
trading range from, say 10,800 to 11,200 we will begin
trading the range. But right now, I'm betting on a
breakaway move away from this key level. Let's see what
happens.
NASDAQ Composite and OEX (S&P 100)
Like clockwork, the NASDAQ zoomed down to the 2,100 level
(pushing through very briefly) and then rocketed skyward,
as if an invisible market elf was saying "no! don't do it!"
Of course, the "elf" is the market participants. Since
2,100 held, and the market did NOT break down through it,
we have to assume the NASDAQ is headed to the upper
boundary at 2,400. For this reason, I would be a buyer
above 2,175 and a seller below. If we stay below this
level and fall back through 2,140 we are likely going to go
through the low, and head on down. The OEX performed a high
dive act today, rising to touch 650 and then retreating.
That is the critical level on that index. **
In Summary:
Still holding short from our break of 11,000. We dropped
to the lower line on the chart, and actually went through
10,850 briefly before recovering, pushing our envelope out
to 10,800. The 10,800 to 11,000 range is open for action,
and anything is possible in the range. My personal
"instinct" says we are going to repel off the 11,000 level,
but that's just a hunch. The main thing to remember is
that 11,000 is important. If we break it, we need to cover
and get Long, with stops at the same level.
Thanks for listening, and good luck in your trading!
Ed Downs
edowns@nirvsys.com
---------------------
** NASDAQ and OEX Charts for today's market are available
to members. At signalwatch.com, click "Become a Member" at
the top or "Member Upgrades" at the left for details on our
various service levels.
---------------------
Definitions:
Short Term vs. Medium Term: The short term is defined as
1-4 days. Most short term commentary is relevant to day
traders for the following session. The medium term is 1-4
weeks.
Fulcrums: A fulcrum is essentially a "line in the sand" or
"demilitarized zone" in the battle between bulls and bears.
These lines, identified by experience, are equilibrium
points between buyers and sellers, and are usually found in
the centers of consolidations (trading ranges). When price
moves away from a fulcrum, it usually moves quickly and a
great distance.
---------------
LINKS TO CHARTS:
Dow 15 Minute Chart
signalwatch.com
Dow 60 Minute Chart
signalwatch.com
Dow Daily Chart
signalwatch.com
Dow Weekly Chart
signalwatch.com
legend
signalwatch.com
---------------------------------------------------------------------------------
Subscribe, send blank mailto:SignalWatch-LITE-on@mail-list.com
Unsubscribe, send blank mailto:SignalWatch-LITE-off@mail-list.com
Change email address, mailto:SignalWatch-LITE-change@mail-list.com
with - OLD address in SUBJECT -
This message was launched into cyberspace to e7870006@tsai.es |
