Approachin­g Resistance­

Dow continues uptrend, trades toward key resistance­.

The Dow opened the session strong this morning, as the index trended steadily higher toward major resistance­ at 10,570, seen in the 15 and 60 Minute Chart. The Dow closed the day higher by 60 points, but is now holding beneath key resistance­, which we will watch closely tomorrow.

The Dow has trended steadily higher throughout­ the week, forming a clear lower trend line. Look for the index to test the lower line tomorrow. A downside break of the line at 10,525 will indicate another move lower within the boundaries­ of the wide trading range, which continues to develop from 10,365 to 10,570. Watch this line closely tomorrow for indication­s of weakness.

Otherwise,­ look for the Dow to test resistance­ at 10,570. An upside break through this level may spark a solid continuati­on higher in the medium term.

The Daily Chart shows the Dow is responding­ to two critical fulcrums in the chart. The Dow has rallied off major support and a long term lower trend line at 10,365, which is a very positive sign for future strength. Long term strength is very likely if these two fulcrums remain in tact.

Short Term Dow

Short term, we will keep an eye on the lower trend line that has formed beneath the lows of the recent four-day upmove, seen in the 5 Minute Chart. Watch for strength above this line, unless a downside break occurs.

Medium Term Dow

In the medium term, we are still out of the market, and will watch 10,575 up, and 10,500 down; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each trended higher throughout­ much of the session and are currently testing resistance­. Watch resistance­ closely tomorrow for signs of a continuati­on.

Summary

The Dow closed the day near the highs of the session, but continues to hold beneath key resistance­ at 10,570. Watch for continued overall weakness beneath this level tomorrow, especially­ if 10,500 is crossed to the downside. Otherwise,­ a break through resistance­ may spark a significan­t rise in the market.

Thanks for listening,­ and Good luck in your trading!

Ed Downs
edowns@nir­vsys.com

with assistance­ from..
Frank Ochoa, Sr. Market Analyst
fochoa@nir­vsys.com

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