While many investors are singing praise as the market tries to make it seven straight weeks of rally, I am on the cautious side after analyzing recent market action.

One of the main focal points of the upcoming week is the amount of earnings data that will be released. If earnings are topped, we could see the market take off and extend its gains, but if estimates are missed, the market might shed the recent gains and then some.

Let’s start by looking at a general chart of the Dow where I have drawn several trend lines to illustrate the current price channel it is trading within.

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From this chart, you can see that the market has reached the top bar of the channel. Another point to take notice of is that if the Dow does bounce off the resistance line and we extend the bottom support line, it would project that the Dow could fall below 6000.

Next, here is a chart that will focus on the recent action of the Dow.

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Here, you can see a divergence in the TSV as well as the huge amount of volume on Friday. To me, Friday’s action shows the characteristics of a turning point and I am bearish after watching this rally run out of steam. I expect that this upcoming week will be the tipping point that turns the market negative and continues the overall down trend.

Ultimately, all we can do is wait and see. The safe bet is to let things unfold a bit and then take a position accordingly. If you are a gambler, I would put my money on things falling.