Looking at the 15-Minute chart of the Dow, we see a nice gap up today, followed by a slow pull-back to the blue 50% retracement line (from the Daily chart). We are clearly in this range, with a downside support level at 23,400 and plenty of movement potential to the upside.
The Daily Chart shows the Fibonacci Retracement tool, spanning the entire range from February to March. The consolidation we see is forming right in the middle of this range, which means the market as a good shot at getting back to the February highs in the next 2 months (since Consolidations are typically continuation patterns, with the pattern marking the 50% point of the move).
Overall thoughts: We are still in a broad range characterized by a large, expanding wedge. While the market itself is still very uncertain it clearly has an upside bias, as if it has already priced in a future recovery. But many believe the reality of economic distress and uncertainty about resuming business as usual will grab hold of the market and drive it lower in coming weeks.
I would say carefully watch the 23,000 level for a downside break, because that will indicate the strong potential for a move back to March lows. In the interim, many stocks are pushing higher while some that made great progress are being sold off. The good news is there are plenty of trading opportunities – for both End of Day and Real Time traders.