For the last 17 months, the DJIA has been in an intermediate advance. This advance started in OCT 2004 at the 9708 low, as shown in CHART #1. Since that low point, the DJIA has posted a series of higher and higher highs and higher and higher lows, to mark this progression. Also notice, that all the highs and lows are clearly marked in black lettering, except for the 11334 March 2006 high that is marked in red. Why is this?
Because, 11334 represents the most immediate major support area in the intermediate term, and looks to be the pivotal point between bull & bear.
If you look at Weekly CHART # 2, notice that an intermediate term 'trend-channel' has emerged, bounded by a perceived upper return line, and the lower boundary or parallel line. Taking a closer look at Weekly Chart # 2, notice that a support line has been drawn across the March high of 11334. Why? To show its significance; below this line, support has technically failed and is starting to look bearish,... above this line, the market stays bullish. Right?... Maybe!... Question: What if the DJIA manages to to rally 100 points or so? Will resistance become a factor above, like support is a factor below? If so, where is the first level of resistance to be found? Well, in the Classical Bar Charting sense, there is no resistance above 11334 on the weekly chart.
But, in another sense, if you turn to the next chart, Weekly Chart #3, you will see where the next possible resistance area for the DJIA may be found. In Weekly Chart #3, notice the bold overhead return line. Also notice, how this line slants upwards and intersects the hypothesized 11500? price area, for next weeks price bar. Could this price area just above, be 'resistance'? Or in another sense, could the 'return line' be the final battle the DJIA will have to tangle with in this on going 'intermediate-bull-trend'? How long will the DJIA be range bound between support at 11334 and the upward slanting 'resistance line'? We Will see.