New Support? Next Stop: 11,500?

The DOW's rallying nicely. MACD is bullish and RSI is not showing an oversold index. While this leaves the door open to a move higher especially since we don't have any resistance within the last 5 years, the run can't last too long: oil prices, interest rates, domestic and national political uncertainty continue. From a technical picture, the index is hitting the upper Bollinger Band - if we're still in a trading range, 95% of all price movements will remain within the bands.

If anything, I believe we're climbing the proverbial "wall of worry" that looms during times of uncertainty. We now have many earnings reports from the last quarter, but the question about the general macro economic conditions remains. In particular, the Fed indicated in their minutes released on Tuesday that they will rely on short-term data and not sweeping policy action. One can deduce that even the Fed is waiting for confirmation of what needs to be done.

While I don't think we'll hit 12,000 anytime soon, the possibility of a move higher to 11,500 exists. On the flip side, and perhaps more important, is to watch whether the DOW forms a new base at 10,900-11,000. Confirmation of this would create many trading opportunities going forward.