Dow, Gold, Dollar: Chart View

The Dow Diamonds(DIA Quote) is trending higher.

In the chart above, I use two simple forms of analysis: the broadening formation (red trend lines), and horizontal support zones shown in blue.

Broadening Formations: This is when the price becomes more volatile, making higher highs and lower lows. I think of it as a megaphone. So when a chart has this pattern, it's virtually yelling at me, and I start taking profits or tightening my stops.

Horizontal Support Zones: I like to focus on support or resistance zones that are a little different. I do not use the tops and bottoms of previous waves for these levels. Instead, I take the average price, then expect the support level to be penetrated somewhat as the level is tested. This is how the market keeps you out of the good trades. (I cover this in great detail in my Stock Market Trading Education Course available in January.)

Analysis: The DIA ETF looks ready for a pullback to the $99-$100 level.