Board-Ansicht
Mix-Ansicht- ED DOWNS Update: - Der letzte Grund, 23.04.2001, 15:09
- Vielen Dank!(o.T.) - Chrizzy, 23.04.2001, 15:29
- Re: ED DOWNS Update: hier die NASDAQ ausführlicher! - Bill, 23.04.2001, 16:06
ED DOWNS Update:
Updated for Monday, April 23, 2001
DOW MARKET COMMENTARY
UP Above 10,625
DN Below 10,575
Pennant Below 10,600
We dropped through 10,575 and formed an upward-sloping pennant in the 15
Minute Chart - a potentially negative sign for Monday.
From yesterday's commentary,"In the very short term, watch 10,680. If
that mark is crossed, the index will probably give up 80-100 points to get
back to the lows of the consolidation. Normally consolidations are
indicators of continuation moves, so I would naturally expect the market to
move higher from here. However, we are 1,000 points plus off the low. So,
logically, we would expect a retracement."
The Dow did pull back about 100 points from the 10,680 line, ending up at
10,580 at the Close. This could be the start of a retracement. The chart
that really worries me is the 15 Minute. You can see an upward sloping
pattern with a lower line at about 10,575. And, this is happening below
10,600. Logically, we would expect this line to be broken and the Dow to
give up 100-200 points early next week. However, if we get back above
10,600 and hold, we will be back in a positive
mode.
As far as our positions go on this page, we exited at 10,575 and will hold
back from entering new positions until 10,625 is crossed, and will then
hold our mental stop at 10,575 again until the index has had a chance to
gain some ground.
Short Term Dow
In the very short term, watch 10,575. I am expecting a push down through
this number Monday. If so, we want to Short and hold for the likely ride
to 10,500 and possibly 10,400. If we start up, I would wait for 10,600 to
be crossed before entering new positions.
Medium Term Dow
We exited our Longs early today at the 10,575 point after a gain of about
1,000 Dow points from our entry around 9,600 a while back. Not bad. Now,
we want to know the same thing everyone else is asking - Are we at the
start of a new bull phase? It's difficult to say, but I am suspicious of
the market below 10,600. Watch for a failure Monday through 10,575 and
begin accumulating shorts there.
NASDAQ and OEX
The NASDAQ has hit our consolidation target of 2,175 and even improved on
it a little bit. Now, we are consolidating in a tight range around 2,150
and simply need to watch which way it breaks. Our levels on this index are
2,170 up and 2,130 down. The OEX is also tightening, and we have clear
breaks in the consolidation there as well, but the posturing of the index
was negative going into the Close. **
In Summary:
Today, we had the start of what could turn into a fairly hefty retracement
on the Dow and other indexes. We have moved a great deal, so this would be
logical, and not necessarily deadly. We are closely watching 10,575 on the
Dow, and are otherwise on the sidelines waiting on 10,625 for new Longs.
Thanks for listening, and good luck in your trading!
Ed Downs
edowns@nirvsys.com
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---------------------
Definitions:
Short vs. Medium Term: The short term is defined as 1-4 days. Most short
term commentary is relevant to day traders for the following session. The
medium term is 1-4 weeks.
*** Fulcrums: A fulcrum is essentially a"line in the sand" or
"demilitarized zone" in the battle between bulls and bears. These lines,
identified by experience, are equilibrium points between buyers and
sellers, and are usually found in the centers of consolidations (trading
ranges). When price moves away from a fulcrum, it usually moves quickly and
a great distance.
(!) Higher-High, Lower-Low rule - As we establish fulcrums, and exit or
enter positions based on them, we want to avoid whipsaws, which are losses
caused by trading back and forth across the line. We do this by waiting
until the recent high or low is violated. For example, let's say a security
(or index) is at 100, which is our fulcrum. We break 100 and go Long. The
market rallies to 103 and then drops back through, so we exit at 100. Now,
we do not go Long again until the recent high, just formed by that reversal
at 103 is crossed. Say the market rallies again, gets to 105 and heads down
through 100. We exit and wait for 105 to be crossed. This process insures
that we will be whipsawed at most 3 times, as continued reversals of this
type will form an expanding triangle - a rare formation.
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