In Dow <http://www.incrediblecharts.com/technical/dow_theory_trends.php> 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 signal. Dow Trend Large Correction USA 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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