Updated Wednesday, 12/10 for Thursday's market.
Key DOW Levels for 12/11
UP Above 8,900
DN Below 8,630
Winding Up..
Dow trades mostly sideways, winds up for potential breakout.
From prior commentary, "...the Dow's bullish advance has been stymied by the major 9,000 level, which has fended off all advances in the last five weeks..."
The Dow opened the day with modest strength this morning, but formed a clear lower high beneath 8,900 and proceeded to test lows at 8,650, as seen in the 15 Minute Chart. The index eventually bounced into the Close and ended the day with a gain of 70 points, but a much bigger breakout move could be seen tomorrow.
The Dow is clearly winding up within a tight, downward-sloping consolidation that has formed over the last three days. This pattern will likely spark the next 500 to 800 point move. If the Dow can get a big upside break through the top of the consolidation at 8,900, we could get another shot at 9,000, which could be nice for bulls.
However, the clearest line in the charts is support at 8,645, which has been tested over the last two days. A solid break through the bottom of this zone could spark heavy selling ahead.
NASDAQ & S&P
The NASDAQ and S&P continue to wind up within clear three-day consolidations, which could lead to big moves soon.
Tomorrow's Strategy
We are still out of the market and will watch 8,900 for Longs, and 8,630 for Shorts; using a 40 point stop and a profit target of 250 points. We will not use the Breakeven Rule for tomorrow's market.
Thanks for listening, and Good luck in your trading!
Ed Downs
edowns@nirvsys.com
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