The Dow Jones industrial average's breakout above 18,300 is significant, but it is also weak.
The weakness is confirmed both with chart and fundamental analysis.
Firstly, the Dow chart has two significant chart patterns that combine to limit the Dow rally in the short term.
The first feature is the well-established trading band. The lower edge of the trading band is near 15,600, the upper edge is near 18,300. The width of the trading band is measured and then projected upwards, giving a target near 21,000.
This is a long-term target, and the Dow is making new highs, but there are technical chart features that will limit the way the Dow moves to hit that target.
Here's how it works. The second feature on the Dow chart is a long-term uptrend line, starting in October 2011. To understand the significance of this trend line we need to understand the way trend lines change polarity or function. between October 2011 October and August 2015 the uptrend line acted as a support level. The Dow would pull back to this level, then rebound and continue the uptrend.