Dow Going Up & Up?

Welcome back from the Easter Long Weekend! :)

Hope you guys enjoyed yourselves!

The Dow made its fifth straight up week last week. In fact, the last time the Dow made 5 up weeks in a row was just before the market crashed in October 2007. So, is the Dow going up up and away from now on? Well, here's the problem... 5 and more up weeks are common in Bull markets but this is a primary Bear market, not a bull market. Such a sudden strength within a primary bear market is definitely going to run into profit taking and breakeven takers very soon. Indeed, as I have mentioned before, the real test of integrity comes when the correction comes in. The depth of the correction will tell us if this is a reversal pattern or just a continuation pattern. For now, short term resistance is around 8500 where I see as the high probability area for that correction. In fact, this is the same view held by the Fib guys, the Wave guys and the Astro guys... is the whole technical analysis community going to hit it this time?

I also suspect that we should see the correction begin as early as late this week, coinciding with the earnings season. If earnings are good, investors are certain to take profit and if earnings are bad, investors are certain to bail, either way isn't good. So this is going to be another period of volatility for sure.

This is also Empire State index and Philly Fed week (see stock market calendar). Investors would also be watching these figures for signs of stabilization or recovery.

For now, the Dow continues to be in a Short Term and Intermediate Term Bull trend in a Primary Bear Trend. Happy Trading!