The DJIA has really been resilient and that’s given a lot of people something to cheer about…even if it’s only temporary.

The first thing that we noticed is that the shorter term resistance has already been broken and that the green days have been more regular than the last few months.  Due to this, many have already started crowing that the bear market is over.  However, we wouldn’t go that far just yet.

What worries us is that the 200-day moving average is serving as a resistance at 8709.  Yes the index is currently slightly above that but it still hasn’t pulled away from it convincingly.  I said it’s not that convincing because the volume that went with the rise didn’t expand.  That’s why this movement is suspect.

Even the movement of the MACD is suspicious.  The DJIA rallied to higher levels yet the MACD seems to have a hard time keeping pace with the index.

I think it’s time to take some profits as the index seems to be readying itself for a fall.

Recommendation: Take profits