Even in its own attempt to rise from the ashes, the DJIA is confused.  It would trade convincingly in one direction, change direction midway and end up in the previous direction by the close?

Whatever reason is causing the DJIA to act this way, it seems that the rally is fizzling out.  Just look at how it has performed in the past 2 weeks, the direction of its rise has weakened and is starting to look toppish.  Is the 100-day moving average preventing it to move higher?  Hard to say right now.  Even the MACD is starting to turn.  This could be a warning sign.

One thing to note is that the moving averages, although 2 of them are below the current level of the index, the situation has still not turned bullish.  Maybe in the next few weeks, we could see them turn positive but until then, we stay cautious.

We expect the index to test the resistance of the trading range at 8240.  We don’t expect the DJIA to break out of the range, but it’s not impossible at this time.  It could be time to enjoy the profits made in the past few weeks.

Recommendation: Take profits
Resistance: 8240