Dow 30 Feb 18 to Feb 22 Outlook

Recap
Option expiration last week. False breakout on first push against Y+1, gave us a go for the Y-0 play. Pullback to Y-0 overnight midweek and bounced back since. Retest of Y+1 later in the week resulted in strong selloff again. This time it dropped below Y-0 but still manage to bounce off fiercely. Closed the week above midpoint and below Y+1.

Outlook
As mentioned last week as long as Dow is trapped in the Y+1 / Y-1 range, there is no direction. So last week joyrides to Y+1 and Y-0 following the crowd was easy. The op ex Friday close, however, was very disturbing as we have not have such wild move on op ex for a long time.

In a way, Dow experienced continuous attempts to push it lower for weeks now yet the price level resolved higher. It is a sign of strength. In another words, Dow has neutralized the overbought condition from late January by going nuts with 2 ways 150+ points swings around 13900.

At this point it is in breakout mode on weekly timeframe. Daily chart signals will have no meaning once the breakout in weekly happens. Be aware of that.