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The Dow and S&P 500 are now in the region of their necklines from the head and shoulders in 2011. That may prove to be a resistance line. Even if the trend continues up, that old support is likely to be resistance on rallies.
While not shown here, if there is a rising wedge pattern forming since the August lows, we are now in the lower end of the price and time reversal zone for it to end based off of typical relations. I may touch on the pattern more soon, but the pattern from October to December has often showed up in the next to last position before a trend change. It is a triangular type pattern. That would fit with the rising wedge scenario and with the overall technical analysis which is showing bearish divergence here (see below).
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The Dow has been the leader on this rally and is at new rally highs since October. But notice the currently sharp bearish divergence in the MACD compared to price. That is the typical look at the end of a trend or pattern. So a reversal to the downside here still may be significant from a technical perspective.
As long as price maintains above the December low, I consider that bullish. But a move below I consider bearish, though it may or may not be a good time to short if it is broken.
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