When we stepped back and reviewed the index charts during the weekend, it became clear the Dow, S&P 500 and NASDAQ are trading in ascending channels.
Since the first week of March, when the indexes have approached the top end of the trading ranges, down they went. The opposite holds true too, touch the bottom and stocks turn green.
Since the Dow has been the strongest of the indexes and is just a few points off its bottom rail level of 12,584.17, if the market sticks to the script, 13,000 should come into view fairly quickly.
At 13,000, we have about 5.6% upside from Friday’s close. As for downside, if the Dow looks like it is going to close below 12,575, we’d be out.