Below looks at the Dow Jones Industrial Average over the past couple of years.
The index has experienced a quality rally over the past 16 months inside of rising channel (A). The Dow started acting heavy and rapid selling took place as it was testing the top of the channel at (1).
The quick 10% decline took it down to the bottom of the rising channel at (2) a week ago today, where a bullish reversal pattern took place.
Dow bulls don’t want to see it start acting heavy again at (3).