by Michael Tarsala, CMT
Take a look at the Dow Jones Industrials (DJI) and you would be hard-pressed to present a bearish case.
Source: MetaStock
Three things are of note:
1) After recent consolidation, we are now close to overtaking the 2007 weekly close of 13,366. It’s taken nearly four-and-a-half years, but the index is now solidly above 2008 levels, and be poised to make a run toward 14,000, possibly testing the all-time highs.
2) The average directional index, the first red line on the chart just below the DJI price in yellow, is far from an extreme level. It is not making an overly bullish case on its own. But more importantly, it is suggesting that the Dow is not anywhere near an overbought extreme. The chance of a reversal appears weak.
3) Momentum is not breathtaking. But it’s positive (above the blue line at the bottom of the chart), and climbing. That’s incrementally positive for the bulls.
Taken together, it makes a case that the market uptrend can persist.
