Since the first week in Feb. we have seen a 10% rise in the Dow and a modestly convincing move to 11,000. 

The weekly chart which we have featured here shows the Dow almost mid range of the trend channel.  The Channel gives us an anticipated guideline approximating the range and thrust of price action.  The angle at which it is drawn also gives us an idea as to whether price can maintain its momentum over the long term.

Here the trend channel appears to be a comfortably progressive advancing price channel.  Pullbacks have been modest and short lived.   Only a serious deterioration in the market psychology will impact the trend channel currently in place. 

Markets generally enjoy challenging the price range that is established in channels.  It is this volatility that creates profit opportunity.  The upper range of this channel has not recently been challenged and looks as though the 12,000 level +- a couple of hundred points is where it might next be touched. 

The current ascent of the market has similar physical characteristics to the rise that occurred in the 90's although it did not start from an area as low as the 90's did. 

As you can see price here is attempting to challenge the top of its price range very soon in the 1200 area.   Which for the Dow might equate to 11,100 or so. 

The channel is strongly in place and it may challenge it to break through and move to higher price ground.  This is likely to occur but not before we have at least a modest correction from which to base a continued advance from. 

The 2002-2003 double/triple bottom took 1 1/2 to 2 years to advance as far as this market has gone in just 1 year.  This lends the current market perception to two extremes very strong and probably overbought currently. 

Strong markets can build on their momentum and get stronger asnd stay overbought.  The longer this imbalance persists the harder and deeper the correction will be when it does occur. 

The Nasdaq is currently 245+- points away from its 2007 high of 2239.  The Naz has a long way to go before it ever thinks of being the market it was once in the 1990's and early 2000 era. 

What does appear to be occuring is a renewed appreciation for growth potential in stocks.  The 100 in this index are no longer small up and coming companies but much larger well established companies that have come into their own and have earnings and growth. 

The likes of Apple, Amazon, Google, Microsoft, Rimm, Bed Bath and Beyond, Mattel, and Genzyme are among the companies listed here.  Many of these stocks are the dominant players in their industries and are more akin to a Dow 30 in size and value.  

These features should continue to propel the Naz higher over the longer term. 

The Russell continues to move higher and has not corrected significantly in a while.  In our last update we suggested a correction would help pull buyers back into the market.  The index consolidated sideways for approx. 10 days and then continued to move higher to where we are now. 

This index along with the S&P small cap, mid cap and the NYSE composite index are higher than they were in the 2000-2002 tops.  A very compelling reason to lilke small cap stocks for the long term.  The market is rewarding them with higher stock prices. 

As you can tell the S&P 600 index is substantially higher than its 2002 high.  The correction into 2003 was minimal compared to the larger cap indexes.  The 2007 correction was severe for all the indexes but the small and mid cap indexes did not fall quite as far and were poised a little better to run higher faster than their large cap cousins. 

It appears this trend is well in place and likely to maintain its strength disparity over the large cap indexes, as growth continues to be rewarded.