Cruising my favorite TA sites and message boards, damn near everyone sees this and is either 1) already short and feeling pain or 2) Is flat and going to go short in a big way on a break. In the TA world, I'd say 95% are bearish right now. Which makes me think that we are going to see a blow off top here, massive short squeeze and sucks in new retail long money. And then the market goes down for the count. Ms Market screws everyone again!
is the talk of the town. Anybody wants to know what the talk is all about... take a look at the explanation of Bearish Rising Wedges. ES is also coiling up tightly as it nears the apex of its wedge. http://www.chartpatterns.com/wedges.htm Don't be aggressive and only place your bets when you get an actual trade signal SPY is also in the same pattern along with a lot of stocks. Gotta love this market...many opportunities around every corner. P.S. The minimum reaction following the completion of the wedge is a move back to the base of the wedge. NihabaAshi
"Don't be aggressive and only place your bets when you get an actual trade signal" What would you recommend as the "actual trade signal"? Wait for an actual break of the wedge, with a close buy stop if it pops back up?
These wedges have been numerous in the indicies in the last two years and have almost always resolved to the downside and sparked a trend change, if memory serves correct. It may be different this time, it may resolve downward but may prove to be a pullback. If it resolves upward, then that could be a blow off top, or the continuation of the trend. Historical odds probably favor a downturn. Someone will have to ask Bulkowski about this. Many indicies that measure momentum or sentiment are now at levels consistent with tops, but they have not begun to reverse. VIX and 200 dma, MCclellan Summation both NYSE and NAZ are at 12 month highs and tomorrow without a selloff will likely place them at highs not seen since 1997, the % of stocks over 200 dma by either 1 or 2 standard deviations is not as high as it got in February 02 but it has so accelerated upward in the last 6 weeks it is now in % terms as far above its 200 ma as I think it has been in years. The momentum indicators are lagging in nature, price will lead. I heard that specialist short interest rose the last two reporting periods. Where can you get this info?