It seems that the Dow Jones is attempting to break through a key resistance level yet again.
Over the last four months we have noticed that the index has been trying very hard to climb above 12614 12707. These levels are key resistance points taken from both the all time 14198 high and also the secondary high of wave 2.
The difficult thing for a trader to do right now is to decide if one should trade for the longer term or the shorter term. It is a difficult question to answer simply because we know the Dow has been trading sideways since mid January. Sideways markets are always difficult for trend traders. Until we can see a clear breakout either above the wave 4 or below 11731 we can only wait on the sidelines.
For day traders the intra-day moves are sufficient to capture small profits but with uncertainty still in the markets many traders have decided to move into the commodities and currencies area to try their luck.
Over the last week we have seen the Dow Jones attempt to get above the 12700 area and unless we can do this quickly we can assume that a Triple Top pattern may take the market lower as a failed attempt.
For short term traders the key level to watch for on the downside is 12520 which if broken may suggest that we could be heading lower.
Notice that the RSI has crossed back above its reference line but is pointing sideways and so even this has not been a clear signal to justify a strong upwards move.
Until the market itself can provide us with further evidence of its direction we may be facing a difficult week ahead.