Approach to Previous High with Trepidation

The DOW has moved over its July highs but is still below the early May high that started the trading range (at the end of an almost year-long bullish run). But on Thursday the DOW closed at a loss for the day after it had tried to move close to the early May high. This suggests weakness. Markets that are strong tend to advance toward and then through previous highs with big strong steps. Look at the DOW’s advance from the lower trading range to the higher one in late November. This is a good example of typical big steps passing through significant resistance.

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