Como se combate o populismo? "Com eleições", responde Fukuyama

[Fibonacci]

Late-Day Strength
Dow swings back and forth throughout the session, but rallies nicely to the Close.

From prior commentary, "...The 15 and 60 Minute Charts show that Dow has formed a clear trend line across the highs of the last seven days of declines. A solid upside break of this line at 10,825 could spark a big rally back toward the 11,000 zone...”

The Dow traded back and forth throughout the session today, making for a very undecided day in terms of direction. However, the index ended the day with a solid rally in the last hour of the session that sent the index through the upper trend line from the 15 Minute Chart. This break could lead to quite a bounce in the medium term.

The Daily Chart shows the Dow continues to look very weak in the medium to longer term outlook. However, the Dow has dropped nearly two weeks without much of a pull-back. As you know, markets do not tend to move in a straight line, so we could see a nice bounce higher before the downtrend is continued.

The 60 Minute Chart shows the Dow has remained in a steady downtrend Nice early May, as the upper trend line shows. We could see a nice bounce back to this upper line at 11,000 before the prevailing downtrend takes over again. Watch for a push above 10,850 for continued signs of near-term strength.

Otherwise, a downside push through 10,725 will make for another key test of prior lows.

Short Term Dow

The Dow got a nice upside break through near-term resistance at 10,800 today, which implies strength tomorrow morning. Watch this level closely for short term direction.

Medium Term Dow

In the medium term, we are out of the market and will watch 10,850 up, and 10,715 down; using 20 point stops.

NASDAQ & S&P

The S&P and NASDAQ each trailed slowly lower before popping late in the day. Keep an eye on on the clear upper trend lines, as they could lead to a nice intraday rally tomorrow.

Summary

The Dow closed the day with a nice rally to end the session with a nice 111 point gain. The index has now gotten an upside break through the steep upper trend line, which could spark a nice reaction rally after the steady decline. Watch 10,850 and 10,725 for early signs of key movement.

Thanks for listening, and Good luck in your trading!

Ed Downs
edowns@nirvsys.com