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When it comes to long-term portfolio construction, this 76-year rising channel has many times been important.

A year ago the Dow hit this line and then backed off for a while. In late March of this year the Dow hit the top of this channel again and has backed off in price again.

 

 

Investors can use a long-term channel such as we see in the Dow to consider lightening up on risk exposure until resistance is taken out. Now two key lines, overhead channel resistance and rising support, are coming into play. In light of this combination, it's quite understandable that markets have become rather choppy of late.

 

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