The Dow is approaching the top of its trend channel and although it may reach 12,150, all the risk is to the downside. The bear market rally that began in October is over.
As the US Dollar rallies on Europe’s woes, the effects of softer commodity prices will filter through into the inflation gauges giving the Fed the cover it needs to begin its next round of money printing.
In the mean time we could see the Dow fall to its next major support level at around 10,400.
1 Year Chart Of The Dow Jones Industrial Average