From the graves of the fathers of technical analysis Edwards
and Magee “Technical Analysis of Stock
Trends”:
Pg 186 "In a
Rising wedge, there is no evident barrier of supply to be vaulted, but rather, a
gradual petering out of investment interest. Prices advance, but each new
up wave is feebler than the last. Finally, demand fails entirely and the
trend reverses. This, a Rising Wedge typifies a situation which is growing
progressively weaker in the technical
sense."
Pg 188
"...in many cases, they rise clear to the apex, and in some, they actually
go a short distance beyond, pushing on out at the Top in a last-gasp rally
before collapsing. Once prices break out of the Wedge downside, they
usually waste little time before declining in
earnest."
SPX testing
FROM BELOW the BROKEN lower ascending wedge trend line from March 9,
2009:
http://www.screencast.com/users/Virginia_Jim/folders/Jing/media/d23cc0ef-7731-4195-a225-d856e31c516b
QQQQ
testing FROM BELOW the BROKEN lower ascending wedge trend line from March 9,
2009:
http://www.screencast.com/users/Virginia_Jim/folders/Jing/media/9be74d80-d4a7-41c7-9080-6adbdf4fe475
Price
must drop to more than 3% of the price at the point of the break to
confirm.
If the breaks
confirm, the October 2 low will not be a major resistance IMO. I expect
the first real resistance will be the August low. And I expect the next 3
weeks will see the July 11 low tested and provide a meaningful bounce. All
just an opinion in the face of a still very large bullish trader population
climbing their ‘wall of worry.’
Jim