Brain,
In the spirit of "may be" I see other possibilities. I hear that second half of March is historically weak, and that was true of SPX, NDX (COMPX), DJIA last year. DJIA and SPX certainly looked bullish yesterday, but in a longer time frame DJIA appears be pulling off the upper boundary of a rising wedge, and SPX pulling off the upper boundary of an ascending triangle. NDX (COMPX) has not been keeping up, and is now about mid range in a symmetric triangle, pulling back form a failed excursion to the upper boundary. The lower boundaries for all these formations are the trend lines originating on the 2001 lows through the February 2002 lows. If the second half of March is again weak, a return to those lines is likely, and would still fit into a generally bullish view of the forward market as long as they are not broken.
For DJIA, another uptrend line originating at the November 1 low through the Jan/Feb lows parallels the upper boundary of the wedge, but represents a deeper level the Dow could hit and still be in an up channel. Whether you see the wedge or the rising channel, a retest of the 10K area would be reasonable, and perhaps necessary to build a base for future expansion. For SPX, a line originating Oct 30 or Nov 1 through the Feb lows is nearly flat, suggesting SPX could be stuck in a range for a while, though I tend to think support from the faster rising line with eventual break above the triangle is more likely. NDX and COMPX have a similar shallow secondary uptrend line.
Sorry I can't draw lines on these charts
stockcharts.com|D
Dan |
