Wednesday, May 17, 2006

 
Daily Market Commentary

Updated Monday, 5/15 for Tuesday's market


Key DOW Levels for 5/17

UP

Above 11,500

DN

Below 11,325


Large Consolidation

- Dow trades back and forth throughout session, holds within large sloping consolidation.
- NASDAQ and S&P each rallied late in the day to close the session with strength. Look for continued development of a potential continuation pattern tomorrow.

Summary

Today's late-day reaction rally pushed the index to the highs of the session. Look for the index to continue to build out at the lows of the overall decline as the next key move develops. A breakout from 11,330 and 11,460 should make for nice movement.each traded sideways-to-down today within the boundaries of their respective ranges. Look for continued range movement ahead of the next key move.

Summary

The Dow has begun to form the framework for a large continuation pattern after dropping steadily from last week's highs. The large consolidation is forming in the sharp of an upward-sloping triangle, which can be a very bearish pattern. Look for continued range development of this pattern before the next big breakout is seen.

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