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DOW TECHNICALS TURNING POSITIVE, BUT...

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Last week, some significant positive technical developments occurred on our GalleryView chart of the Dow:

Dpw Jones Industrials

After recovering to remain above the 200-day moving the previous week (see the red candle whose shadow dipped all the way to 12,517?), the Dow has rebounded nicely with a nice string of tall white candles. Those candles have managed to turn around the MACD and push the MACD Histogram back into positive territory. In addition, the Chaiken Money Flow (CMF) has also returned to the green side of the ledger.

So is it safe to jump back into the market right now? Well... There is one really big negative on the chart too. Can you spot it? If not, don't worry - John Murphy talks about it in detail below.

The declining market volume that accompanies this rise in prices should give everyone pause. As the Dow closes in on it's 50-day moving average (blue line), expect it to reverse lower unless buying volume increases significantly.

Chip Anderson
About the author: is the founder and president of StockCharts.com. He founded the company after working as a Windows developer and corporate consultant at Microsoft from 1987 to 1997. Since 1999, Chip has guided the growth and development of StockCharts.com into a trusted financial enterprise and highly-valued resource in the industry. In this blog, Chip shares his tips and tricks on how to maximize the tools and resources available at StockCharts.com, and provides updates about new features or additions to the site. Learn More
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