SPX and INDU: The Value of Melt-Up Channels

SPX continued its insane rally on Friday, although futures are indicated a minor gap down for Monday's open.  Just like last time, that gap down won't mean anything unless bears can sustain a breakdown of the green melt-up channel.

Note that SPX has rallied more than 300 points since I first drew that channel.  That's the value of using channels like this -- you avoid exiting longs too early and you don't even consider shorts when the market is inside an obvious channel (just like you don't consider longs when the market is still inside a crash channel).  

Longer-term, we're still about 10 days out from the end of the month, but it's worth considering (granted: early and things could still change) that if this monthly candle holds, it would be a bullish signal:

Finally, INDU has now rallied from my green target all the way back up to blue resistance:

In conclusion, there is some resistance at Friday's high (blue line on INDU, top of the green channel in SPX), so bears at least have a chance to do something with that... however, as long as SPX holds the melt-up channel, that has to be given precedence and we'll just have to see how it shakes out.  Trade safe.