5 Star System Shortsale DOW Index

Dow traded lower prices as indicated by the Friday's closing. A weak closing on BUY day is usually followed by Buy Day Low Violation on SELL DAY (per Taylor's Book Method)

Today was SELL DAY. No surprise. Dow ended 99 points lower.

Technically, there were two scalp shorts in the early session. Our system shouted SELL in the second session after lunch time.

Early Warning System identified a Short entry and it was confirmed by 5 Star System.

A nice decline went for 100+ points.

Our system demands courage to follow it, especially when the trade is in substantial profits.

Take emotion out of trading. To be successful in trading, the attitude towards money has to be adjusted.

We take as much profits as the system delivers.

Serious technical damage in Blue Chip Index Dow

In weekly Dow chart, it is resting right on 50 week moving average line. CCI lines crossed down CCIMA lines.

The fast CCI line hesitated on Zero line for two weeks but this week was the penetration to the negative side. It is now -164.45 as seen in the chart.

The slow CCI line also crossed into MA line. It crossed up in November last year which resulted in 6 months bull run.

Now it just crossed down. Unless it is not rejected in two weeks' time, Dow will head into the bear trend which may last a few months.

Bull side

• 50 wk MA line support
• Stochastics near over-sold (a bit pre-emptive to say that)

Bear side

• fast CCI line cross down Zero line
• slow CCI line cross down for the first time in more than six months
• MACD losing momentum

Unless it can come back above 11243, we favour more down side.

Trading DOW : Bearish BUY day

Bullish attempts failed when the prices broke down below Super Trend(ST) support line. Yesterday's LONG at 10855 gave us +80 points.

Today is range day in technical terms because long-term CCI could not penetrate above 100 line and this rejection made MACDHistogram Momentum's bearish move in charge.

Midday, prices reversed the trend. But broke down below ST again.

Tomorrow: SELL day

We can expect breach of today's low as the closing was weak on Buy day. Today was NR5 day as well. Some bearish pressure will force the index to trade lower. It may recover from lower prices though.