Updated Thursday, 11/8 for Friday's Market
Key DOW Levels for 11/9
UP Above 9,600
DN Below 9,550
Back to 9,600
The Dow rallies and pulls back to form an expanded triangle
pattern. Watch support at 9,550.
>From yesterday's commentary, "In the Medium Term, we are
Long from our entry at 9,475, holding stops at the same
level. I am going to watch to see if the market can hold
the 9,550 level. This is a fairly important support line
in the 15 Minute Chart today. If we can stay above it, we
will probably rally through the top...."
The Dow held well above our watch point of 9,550 today,
rallying past 9,700 before turning back to the 9,600 level.
If you look at 15 Minute Chart, you can see a downturn
from the top of the channel, implying that we have seen an
overextended point in the chart.
We want to establish 9,600 as the "fulcrum" for action for
Friday - Long above and Short below. In general, we are
consolidating at the high, in an expanding triangle
formation, with 9,550 for a lower support boundary and
9,800 on the upper. If we turn up through 9,600 it would
be logical to expect that the index will continue on to the
consolidation target forecast by the consolidation at 9,450
- on up to 9,800. If we drop through 9,550 we will likely
continue down to the 50% retracement point around 9,400.
Short Term Dow
Short term, we see a downward channel in the 1 Minute
Chart, with upper boundary at 9,590 and lower at 9,550. I
would watch to trade breaks of these levels near the Open.
Medium Term Dow
In the Medium Term, we are still Long from 9,475 and will
hold our stop at 9,550. I think we are at about 50/50 odds
for tomorrow, and would simply watch 9,600 to the upside
and 9,550 down for an indication of directional bias.
Personally, I am expecting more of a retracement. We will
go Short on the page on a crossing of 9,550 and hold stops
at the same level.
NASDAQ & OEX
The NASDAQ retraced much more than the Dow today, as did
the OEX. We have been expecting this for several sessions.
The bigger news on these indexes is the very clear
expanded triangle patterns you can see in the 15 Minute
Charts. These patterns are typically bearish, but we are at
the lower boundaries, and therefore will be watching for a
bounce to imply that a new pass up is to follow. *
Summary
If you look at all three indexes that we track, you can see
the second chink in the armor (the first was yesterday).
The NASDAQ and OEX have pulled back after rallying to make
new relative highs. We will be watching our fulcrum levels
tomorrow to see if there is downside follow-through, or a
new push through our "balance points" to indicate higher
levels are to come. For the Dow, this fulcrum is still at
9,600.
Thanks for listening, and Good luck in your trading..
Ed Downs
signalwatch.com |
