Dow Trading Range

Forget standard deviations, trading envelopes, and 5% bands; it's in the moving averages!  Over the last two weeks we have highlighted the fact that market technicians appear to be looking at the Dow for their guidance rather than the S&P 500.  While our contention remains that strict technical analysis is but one tool in a tool box, we cannot deny that traders have been watching for technical indicators recently; if not only for lack of a better guide. 

Today we note that since the July 19th high, the Dow Jones Industrial Average has been more or less range-bound below its 50-day and above its 200-day.  This is not necessarily bad.  The 200-day is still going up, and sideways trading after a shake-up will allow for better decisions and digestion.