A subsequent break-out above the range is a powerfully bullish signal. It is not an indication of bullishness but in fact a confirmation of bearishness. It is exactly what we would expect to see in a market that is breaking down. Of course not. If your car begins to sputter and choke, it doesn't necessarily mean that a major breakdown is in the works.
Nothing has to happen.
But it is a good sign that something is wrong and that signal should not be ignored. When the market begins to sputter and choke, you'd be well advised to take a good look under the hood and make some preparations before you're left without a ride, so to speak. Technicals are a good indication of the current state of the market and don't necessarily define the future. Nonetheless, from what I have pointed it out, it is quite apparent that the Dow has demonstrated some very significant structural weaknesses, the sort that are unlikely to be undone by a mild downdraft. Large expansions are generally followed by large contractions.