A Daily Swing Trade

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- Dow breaks triangle to upside, rallies for huge gains.

- The S&P and NASDAQ each opened strong this morning, but finished even stronger. Key patterns were broken to the upside, which could field an more strength ahead.

Summary

The Dow closed the day with a huge gain today after blow through the top of the large triangle range. The index is now in a good position to continue pushing higher still. Look for continued overall strength above 11,000.

The Accumulation/Distribution Line was developed by Marc Chaikin to assess the cumulative flow of money into and out of a security. He decided to focus on the price action for a given period (day, week, month) and derived a formula to calculate a value based on the location of the close, relative to the range for the period. This is the "Close Location Value" or CLV. The CLV ranges from plus one to minus one with the center point at zero.

The signals for the Accumulation/Distribution Line are fairly straightforward and involve divergence or confirmation. A bullish signal is given when the Accumulation/Distribution Line forms a positive divergence. Be wary of weak positive divergences that fail to make higher reaction highs. A two-week positive divergence should be suspect. However, a multi-month positive divergence deserves serious attention...

- Dow drags early, but rallies steadily to the Close.

- The S&P and NASDAQ each pushed slowly lower throughout the session, but rallies solidly to the Close. Each index continues to wind up for the big breakout move.

Summary

The Dow ended the day with a nice bounce to the Close, but continues to wind up within the boundaries of the large triangle range, which will definitely pack some punch once a breakout occurs. Continue to watch 10,900 for another round of weakness.

- Dow sells off from early highs, drops steadily to the Close.

- The S&P and NASDAQ each broke key patterns to the downside en route to steady weakness today. Look for continuation patterns to form ahead of the next key move.

Summary

The Dow closed the day with a steady decline and could be on its way to another sharp sell-off within the overall downtrend. Look for continued overall weakness beneath 11,100, unless this level can be broken and held. Further weakness should be seen beneath 10,900.

The Detrended Price Oscillator is a tool that smoothes the trend in prices, allowing you to more easily identify cycles and overbought/oversold levels.

If you think of long-term cycles as made up of a series of short-term cycles, then analyzing these shorter term components can be helpful in identifying major turning points...

- Dow holds throughout session, rises to the Close.

- The S&P and NASDAQ each traded quietly today, but the tech-heavy index fell behind on the late-day rally to the Close by the S&P. Each index continues to wind up within their respective ranges, which could offer big breakout potential.

Summary

The Dow closed the day with a nice late-day rally to the Close, but continues to hold at the center of the large triangle that continues to develop in the 60 Minute Chart. Watch for a solid breakout from this range for key medium-to-long term direction.

- Dow trades sideways throughout session, forms key triangle at highs.

- The S&P and NASDAQ each traded mostly sideways today and continue to build out within the boundaries of potentially powerful patterns. Watch the triangle ranges for key movement.

Summary

The Dow closed the day with a modest loss, but is winding up within the boundaries of a very clear and solid triangle consolidation that could make for a big week next week. Watch 11,075 and 10,950 for a solid breakout for the next key move.

The Triple Exponential Moving Average (TRIX) is an oscillator used to identify oversold and overbought markets as well as a momentum indicator. For use as an oscillator look for a positive value to indicate an overbought market and a negative value indicate an oversold market. When TRIX is used as a momentum indicator, a positive value suggests increasing momentum just as a negative value suggests momentum is decreasing. Some believe that the TRIX crossing above the zero line is a buy signal and a closing below the zero line is a sell signal. Divergence between price and TRIX can also indicate significant turning points in the market.

Two advantages of TRIX over other trend indicators is its filtration of market noise and a tendency to be a leading rather than a lagging indicator. By using triple exponential smoothing, "insignificant" cycles are filtered out. It can lead a market because it measures the difference between each bar's smoothed version of the price information. When used as a leading indicator, TRIX is best used in conjunction with another market-timing indicator so as to reduce false signals...