I don't know much about TA, but I subscribe to a service that has issued warning:
The Dow has me somewhat worried, longer term. Look at the Weekly Chart -
you can see that we may be on the backside of a new diamond formation in
this timeframe. If so - we could see a really big crash in about 6 weeks.
For now, I would just keep my eyes open for signs of severe weakness.
signalwatch.com.
And, the story is - Expanding Triangles (or, Broadening formations). Let me
quote a few lines from Edwards & MaGee, the bible of technical patterns,
"... the Broadening formation may be said to suggest a market lacking
intelligent sponsorship and out of control - a situation, usually, in which
the public is excitedly committed and which is being whipped around by wild
rumors... the fact that chart pictures of this type make their appearance,
as a rule, only at the end of in the final phases of a long Bull Market
lends credence to them." **
If you look at the 60 Minute Chart, you see an Expanding Triangle. Look at
the Weekly Chart - same thing. Is this telling us something? Is the market
just warming up for a REALLY BIG meltdown? Not sure. What I CAN do is tell
you where I think the levels are to indicate that either a recover or new
sell-off is beginning, so let's discuss that subject.
** from Technical Analysis of Stock Trends, 6th edition, page 169.
What are your thoughts ? |
