The location of that resistance is pointed to by the blue arrow below. As you can see from what played out following my post, the herd, which understood this to be important resistance, powered up through it with gusto. Some consider this to be unquestioningly bullish but since all of this follows what I think counts best as 5 down following a long uptrend, I'm sticking with my current analysis which is that this is nothing more than a deep vee second wave and that the recent $77 peak was the E wave throw over of a rising wedge. Then it fell below the lower rail and is now back testing from below.
I am not saying this "must" break down from here. In fact EWI has repeated their view that the DJIA might have a pullback soon but eventually it will go to a higher high. I never disagree with these guys lightly. But since that $77 peak I count 5 waves down to $73 ish and then only 3 back up. So you can see how my count sits on a knife edge right here and in fact whether I turn out to be correct or incorrect at the end of the day I like the fact that the decision point comes down to something that is clearly quantifiable: if my count is right we should not see a higher high than the one which kisses that lower rail from below. So at this point I think that we have an owl, declining double top 2nd wave. If I'm right then the next wave down is a 3rd...
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