Dow breaks psychological 10,000 resistance - trading ranges reset

I have listened to some analysts that believed that a 10% or even a 20% correction could occur. But if you look at the Dow from a technical perspective, away from an overall overbought signals what you do see is a tight trading range and it is leaning upward. This is short term buying and selling.

This rally started from 10th July 2009 when the Dow sat at 8093 after it's lows of 6517 in March 2009.

So US markets are rallying on three things; 1) direct liquidity being pumped into markets on Federal Reserve clandestine operations at about 3 trillion to 5 plus trillion in asset swap programs. In simple terms, The Federal Reserve takes assets and gives out loans. Basically a private printing press for Wall Street. 2) President Obama's fiscal stimulus programs which essentially is trying to create consumption from tax credits and other initiatives to reinstate another consumption/asset bubble, this of course creates temporary confidence in the market. Also the US government is currently underwriting everything they can, they (US government) have essentially become a huge insurance company to the US economy. 3) The most important aspect to stock rallies in a recessionary environment is a weakened dollar. It's a no brainier that a 0% on US Dollars forces speculation, hence stock rallies.

In summary if the above three actions for equity supports continue and we could say (at this point) they are maintained ad infinitum, then stocks will go higher. The 10% /20% correction can only occur if something very dire occurs, otherwise it is a traders market and small players may get some crumbs on dips.

Trading range is now reset between 10016 and 9500, with supports at 9589/9130

With one of the best forward indicators you can use the OBV is showing an increase in forward positions (via volume) on the Dow, or 'smart money' flowing into stocks. Continued buying will take place on the Dow

please refer to graph (click for larger image)