In Dow <>
Theory, the start of a bull trend is normally signaled by a higher secondary
trough [HL] followed by a new high. 

Dow Trend Start

However, we occasionally encounter a large correction, where a lower
secondary trough [LL] is followed by a break above the preceding high. The
pattern is more prone to failure and there is some dispute as to whether it
qualifies as a valid trend start. Large corrections have been particularly
prevalent in recent weeks where I have referred to them as a weak reversal

Dow Trend Large Correction


Dow Jones Industrial Average 

The Dow broke through resistance at 8600 before consolidating in a narrow
range on low volume. Normally a continuation pattern, we can expect a test
of 9000. Reversal below 8600 is unlikely, but would signal the end of the
bear market rally. In the longer term, strong resistance is expected at 9000
- followed by a secondary correction to test primary support at 6500.
Breakout above 9000 would offer a weak reversal (large correction) signal:
to a primary up-trend. 

Dow Jones Industrial Average




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