Morning all

Morning again.

Here's Ed's twopenny's worth.


Updated 9/15 for Thursday's market.
Key DOW Levels for 9/16
UP Above 10,350
DN Below 10,200

Downside Break
Dow breaks lower trend line, sells off to the Close.

From prior commentary, "...the index gained slightly on the session, but is now hugging the major lower channel boundary, seen in the 15 and 60 Minute Charts. We will watch this line closely tomorrow, as a downside break of 10,300 will cause a violation of the current uptrend. Such a break could spark a sharp decline in the near term..."
The Dow got a solid downside break through the major lower channel boundary at 10,300 this morning, setting off a steady decline throughout the session, worth 87 points, as seen in the 60 Minute Chart. The fact that we now have our downside break implies that we may see a new change of trend.

Looking at the Daily Chart shows the Dow is beginning to show weakness below the major upper channel boundary, which has continued to develop throughout the year. A downside push through 10,200 could make for another big decline within the channel's boundaries, toward 9,800.

The 60 Minute Chart shows the Dow may form a range at the highs from 10,215 to 10,350 before another big move occurs. An upside move through 10,270 will indicate strength back within the range; while a break below 10,200 will make for a continuation lower.

Short Term Dow

Short term, the Dow has formed an expanding triangle consolidation at the lows of the 5 Minute Chart from 10,230 to 10,270, which implies weakness tomorrow morning. Watch for a break from this range for direction at the Open.

Medium Term Dow

In the medium term, we entered the market Short this morning at 10,270 and are still in the trade. We will continue to hold stops at the entry for tomorrow's market and will want to stay Short below 10,200. We will look for Longs above 10,350; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each traded lower today, ending the day at the session lows. The S&P has broken a clear lower trend line and the NASDAQ has broken a consolidation to the downside; each indicating further weakness tomorrow. *

Summary

The Dow finally got a solid break through the clear major lower trend line at 10,300 today, sparking a solid decline throughout the session. This may be the beginning of a new downtrend, but we could see further range movement before another big move occurs. Watch 10,200 down, and 10,275 up for movement tomorrow.

Thanks for listening, and Good luck in your trading!

Ed Downs
edowns@nirvsys.com

cheers druid.