Typical Bull Trap & Market Squeeze

DOW JONES as of April 20, 2015

The Dow's recovery back above the 18000 after the triple digit decline was interpreted by some analysts as a technical reaction. Again, the Bank of China's RRR reduction have provided the equalizer. A true example of a roller coaster ride on both sides of the trade  and where traders again were squeeze out from a typical bull trap.

The Dow's trading range is still within the 18288 high and 17500 low well within its consolidation as defined using the Donchian Channel as reflected on the chart below. The upswing was done with less volume which simply mean that an equal # of short-covering was traded and reacted on the recent overseas announcement from the Bank of China. 

The next few trading days would define the next true direction relatively for the week. And watch for the price action of the US Dollar with the DXY currently re-testing the 98.10 initial resistance. Any price above this level will remain net positive for another price recovery or even yet a continuing trend direction for the US Dollar.