A Daily Swing Trade

Fibonacci Retracements are displayed by first drawing a trendline between two extreme points, i.e. a trough and opposing peak. A series of horizontal lines are drawn intersecting the trendline at the Fibonacci levels.

After a significant price move in either up or down direction, prices will often give back a significant portion (if not all) of the original move. As prices retrace, look for support and resistance levels often occurring at or near the Fibonacci Retracement levels.

- Dow pulls back from recent highs, holds at 11,000 zone.

- The S&P and NASDAQ each sold off early in the day and are now holding at lows above key lower trend lines. Key in on these lines, as they could provide nice movement tomorrow.

Summary

The Dow closed the day with a slow decline today, but continues to hold above the key 10,900 support level, which is the clear fulcrum in the charts at this point. Look for continued overall strength above this zone tomorrow; unless a solid break takes it out.

- Dow breaks consolidation to upside, rallies throughout the day.

- The S&P and NASDAQ each got solid upside moves today, which could translate into much bigger moves ahead. Keep an eye on the clear upper trend lines tomorrow, as a break could be huge for direction.

Summary

The Dow ended the day with a late-day decline, but continues to hold above the major upper trend line, which indicates a sense of bullishness not seen in quite a while. If the index can continue to hold above 10,900, continued overall strength should be seen.

- Dow ends session with a gain, forms clear consolidation range at highs.

- The S&P and NASDAQ each traded mostly sideways-to-down today, but continue to hold near the overall highs of the latest advance. An upside break from their respective ranges could fire up another solid advance soon.

Summary

The Dow closed a fairly indecisive session higher today, and continues to hold within the boundaries of a potentially bullish consolidation. A breakout from this range could be big for medium term movement.

The Fisher Transform indicator attempts to be a major turning point indicator and is based on John Ehlers' November 2002 Stocks and Commodities Magazine article, "Using The Fisher Transform."

With distinct turning points and a rapid response time, the Fisher Transform uses the assumption that while prices do not have a normal or Gaussian probability density function (that familiar bell-shaped curve), you can create a nearly Gaussian probability density function by normalizing price (or an indicator such as RSI) and applying the Fisher Transform. Use the resulting peak swings to clearly identify price reversals.

- Dow reverses from upper trend line, ends session lower.

- The S&P and NASDAQ each dragged lower from their respective highs today and continue to hold beneath key upper lines. Watch for continued range movement tomorrow, as the indexes gear up for the next big move.

Summary

The Dow ended the day lower after reversing down from the major upper trend line at 11,050. The is now holding ground between 10,900 and 11,050 just beneath the upper trend line. A breakout from this range will likely influence key market direction.

- Dow trades sideways throughout session, holds yesterday's big gains.

- The S&P and NASDAQ each traded mostly sideways throughout the session today, as each gears up for the next big move. Watch the tight consolidation boundaries for entry opportunities Monday.

Summary

The Dow closed the day quietly within the boundaries of a tight consolidation, which we will watch closely for Monday's market. The fact that the consolidation has formed right at the upper trend line indicates that a big break or bounce could be ahead. Watch this line closely next week.