Thursday, August 8, 2013
DOW Weekly Rising Wedge
Below I illustrate the rising wedge form the market has taken since the rally began in 2009, with throw-overs and throw-unders. This volatility simply serves to illustrate the intense emotion in the market. And, the final move up is likely to be another throw-over, before a massive reversal to the downside and a resumption of the larger bear market.
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I followed Robert Prechter and his EWI organization for awhile and subscribed to some of their newsletters. Though I like some of their free educational materials, in the end I found them to be on the wrong side of the market. They are outstanding marketers, and have quite a presence on the internet, but at the end of the day, they don't help you make money. Where they fail is in applying EW theory to the actual market. For them to perpetuate the idea that we've been in a giant bear market for the past 6 years is just plain wrong. In Prechter we do not trust. Good luck following the herd Chris.
ReplyDeletethis is a critical chart and somehow has been missed by most everyone. It is a classic rising wedge composed of multiple smaller wedges. the problem with wedges is they can begin to breakdown only to stop and form an even larger wedge, such as occurred in 2010 and 2011, and it is hard to tell when the wedge is really over. However, this time, we have vix, nyad and multiple oscillator divergences as well as a beautiful ABC EW count so I think we are very close. hopefully, tim wood's dna markers show up soon!
ReplyDeleteCheers Gideon!
ReplyDeletei think you should lower the lower trendline a bit to fit the points better. Could you please post an updated indu chart?
ReplyDeleteThe lower trendline simply connects the March 2009 lows with the October 2011 lows. Since those are the two most significant lows of the entire rally,it makes the most sense. Redrawing it to fit other points would not be as significant.
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