Midweek: The Dow 5

The Dow closed above 14,250 today. Hourly chart below.

www.freestockcharts.com

Nice strong break of the broadening formation. Price action kind of trailed off afterwards but that's normal. Where do we go from here? At this point I'm bullish long term and short term so I'll be looking for buys. I'm a little worried about the pullback that never came but at this point the chart seems mostly bullish. This next chart is a log scaled quarterly chart of the Dow.

www.freestockcharts.com

Because of the time frame involved calling this a broadening formation is probably incorrect. The more interesting thing about this is that we can get a vague idea of where the Dow might be going to. Right now that top line is at roughly 16,500 and the bottom is at roughly 5,950. Historically the Dow never really goes lower than the 100 period on this view so I think the real range is more like 16,500 to 8,000. I don't think we'll see 8,000 any time soon though, like I said I'm mostly bullish at this point.
The main issue with the market right now is that it is not in a true bull phase. Price action has only been moving up for a very short period of time and large moves down have happened recently. I believe that buying now is a good idea but at the same time I don't think the Dow will see a resumption of the major bull trend until it breaks 16,500 or so. This leaves more than 2,000 points of run so it's not really a gloomy view. Trading on a quarterly time frame isn't really a fun game to play anyway because of the time involved, the weekly view is really the longest I would go for when making a trade. Sometimes it is nice to look at things from a distance though.