The Bleeding Slows as Market Begins to React to Daily Support
Good day! Wednesday was a choppy session for the market with most of the setups in play forming on the five-minute time frames as anticipated. The bulls continued to struggle, but the daily support we've seen coming in after last week's sharp selloff has continued to hold. The Nasdaq shows this exhaustion the most clearly in the form of three waves of selling on the 60-minute time frame. I've detailed these waves on the daily Nasdaq chart by circling the congestion periods between each wave in blue.
Dow Jones Industrial Average
Although exhaustion is clearly the market's mode heading into Thursday, the bears are still showing the upper hand with slower upside moves on the five- to 15-minute time frames than when compared to the swings lower. This remains the case heading into Thursday morning as well and it's going to mean a focus on day trade type of action once again throughout the day. Strong follow-through for new swing trades (multi-day holds) in either direction will be more difficult to achieve.
The Dow Jones Industrial Average ($DJI) ended the day with a loss of 21.87 points, or 0.18%, and closed at 12,048.94 on Wednesday. Twelve of the Dow's thirty index components posted a gain. The top performers were Verizon (VZ) (+1.47%), Johnson & Johnson (JNJ) (+0.98%), Exxon Mobil (XOM) (+0.95%), and Merck (MRK) (+0.62%). The weakest were Caterpillar (CAT) (-1.84%), Alcoa (AA) (-1.78%), American Express (AXP) (-1.62%), and Cicso Systems (CSCO) (-1.35%).