Is a Rising Dow Bullish?

The media is cheering on the rising Dow as it pushed to yet another new all time high yesterday. Traders are hyping a rotation into the blue chips, arguing that we are entering a new era where blue chips will lead. We have to ask, these really bullish developments? By our readings, not really. The flight to blue chips is more indicative of institutional money that is getting nervous about the market. They have been moving out of the speculative small cap stocks (just check the Russell 2000 ETF IWM to see) and into the highly liquid blue chip sectors. This is what occurs at market tops not at market breakouts. And, since the Dow is leading let's take a close look at it. Below is the weekly Dow chart. Note that weekly resistance is at 11,840; just barely more than 100 points from yesterday's close. The Dow has been turned back at this rising resistance line each time for the past 2 1/2 years. Why should we expect this time to be different when tech lags and when speculative money is running for safe havens?

Note that the QQQQ accomplished the first leg (the up arrow) in the scenario provided yesterday. Now we wait to see if it will indeed be turned back at this area.