The dow is currently stuck in a sideways consolidation band. The traders are running things right now. Big sell offs by institutions are on hold for a bit. Hesitant "investors" are just sitting on the sidelines, aggressive "investors" are out of cash since they can't stop themselves from buying into weakness.
Right now support and resistance is the name of the game. 8000 on the bottom, 9500 on the top. I expect to see the bottom tapped once or twice more before the next swing up. The best trade will be shorting around 9500. The final peak should be about 12 weeks from the first tap of the bottom.
Eventually this range will break down and the next down leg will be upon us. The recession hasn't hardly even started yet you see. We have most likely 4 more legs down to go. From my long term model, I am looking at worst case Dow 3000 May of 2010.
If we get a quick drop below 8000 it will be a conundrum. This could either be capitulation before the next swing up or the break down coming early. I will be betting we will head back up, this time.