Re the Dow, the most likely explanation is a pullback into the channel. I think you mentioned the possibility of a sideways drift followed by more upside, and that is certainly possible.
But the fact is the Dow has traded within that regression channel for all except about 3 weeks over the last year. I guess we could see the same thing develop now. But I'd say most likely the Dow will continue to trade within that established channel.
Well, as it turned out, the Dow did respect that upper regression channel rail.
Now it has pulled back, and if it again reaches that top rail by the end of this month, that would be about 11,666 (+2% gain over today's close). If it takes longer, then the gain will be more because the regression channel is rising at the rate of about 83 points a month.
I think it will indeed retest that resistance, with similar results.
I think the moral of this story is that it is not wise to bet against a long-standing regression channel; the longer the channel, the stronger it is, and 57 weeks is a pretty solid channel.
I don't think it is likely we'll see a break to the upside, but if that lower rail falls, that will be highly significant because the entire 57 week channel is easily contained within the much more important long-term regression channel dating back 189 weeks now (second chart; I drew in the medium-term channel so they are superimposed).
Notice that the Dow is currently testing support at the midline of the long-term regression channel. That is strong support, but this is the first test of that support after the successful break through resistance at that same level 4 weeks ago. So.... this is an important line in the sand for the Dow, IMHO. Could go either way, but I think most likely the test will be successful.
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