The popular media is focused on the Dow and the inevitable breakout above 20,000.
However, the best and most stable index is the Nasdaq and this is clearly seen in the monthly chart. The monthly chart is used for strategic analysis and asset allocation.
The Nasdaq chart has two analysis features.
The first feature is the long-term uptrend trading channel A. A trading channel is created by two parallel sloping trend lines. The lower trend-line starts from the Nasdaq low in March 2009. The trend-line placement is confirmed by successful rebound tests in 2011, and in February 2016.
B starts in April 2010. This trend line was broken on the upside in December.2013. After December 2013, the trend-line acted as a support level. The Nasdaq clustered around the upper trend-line until January 2016.This behavior is very bullish.
The Nasdaq dipped below the upper trend line for five months in 2016 but in July 2016, the index moved above the upper trend-line. This move signals renewed bullishness in the Nasdaq.
The Nasdaq is again using trend line B as a support level and clustering above the value of trend line B. This is a very strong bullish trend signal.