Up Again.. The Narrow Range Solidifies
“Whenever Support is approached from above, the question is always, “Break or Bounce?” Either can provide great opportunity.” Wednesday, the market executed the classic “Z maneuver” – up, down, up. But if we look at the intraday chart, we see that it once again honored Support at 25,750 – turning up at the end of the session. So, the way to bet today is for an upside move to the top of the narrow range, but that’s just what to expect. What we want to watch for is a break of the narrow range.
DJIA – 39 Minutes
The Daily Chart continues to show the wide range, with Long Term Support resting on 25,000. We have the sub-range marked (25,750 to 26,300), which is operative right now. Looking at the Daily Chart, and because the narrow range is at the bottom of the wider range, I can make the case for a break of Support and a continuation to the bottom of the wide range at 25,000.
DJIA – Daily
The solidification of this range is great news because trading the break of either side should be a no-brainer. At this point, all we have to do is watch the boundaries of the narrow range. If either 26,300 is broken to the upside or 25,750 to the downside, we should see 500+ points of movement in follow-through. In the entire range, there is 1,300 points of movement potential.
Ed Downs
