Is the Dow Jones breaking out of its channel?

Is this the breakout for the Dow?

The big question is this. Do we have a break out? It looks very much like it. We can see a break in the price pattern of the Dow Jones. Instead of turning round when it hit the top of the channel it sat at the top of its travel for seven trading days while I had kittens. I had bought shorts and they were losing me money. Then today we have what looks like a clear break out. Some would say I am too precipitous in calling this move and I should wait for a higher low and a higher high. But today we do have a higher high and yesterday could be interpreted as a higher low after Tuesday which was an outside day and provided a local high as well as a new low.

Well I have ditched my shorts with a big sigh of relief and a horrible hole in my pocket. And more adventurously I have gone back into the market. I subscribe to a service called VectorVest which provides a system for picking shares. I have had it for almost two years now and when I first bought it I made a lot of money. Since then the opportunities for finding undervalued shares and realising a profit have been few and far between. And the ones that have arisen I have missed. VV provides a wide variety of systems and its greatest strength is that it allows you to backtest how well they have performed in the past. I have sought out the strategies that work best when shares have been beaten back as is the case at present. They tend to be shares that have lost ground fastest in the market but still have intrinsic value. They tend to have great volatility so one must be careful and be ready to take profits or cut losses quickly. So far I have used the system to mine for shares with special characteristics. I chose them on the basis that they did well in the past when the market situation was similar to the one we see today. So far I have only bought into the UK market and have bought the following shares. I am not recommending these shares and am well aware that I might have jumped into the market too soon and will get my fingers burnt. The shares are SGP LAM NWR INVP RGU EMG CSR AFR.

If the break out appears to be holding I may buy some US shares using the same system later.

For precious metals it has been a roller coaster of a day. There was a strong rally from overnight which strengthened as the morning went on and then faltered with the opening of the US market. The rally provided me with a decent profit early on which faded later.

My asset allocation is now precious metals 33%; other commodities 5%; equities 16%; cash 47%.