LG,
As you mentioned a few days ago, that the FLAG PATTERN was getting a bit overextended, I noticed the previous FLAG PATTERN may have changed into a RISING WEDGE which is a bearish signal - chartpatterns.com
UPPER TRENDLINE OF WEDGE = connect 9/4, 9/16, 9/24 which is pointing to 8200 approximately for MON/TUE.
LOWER TRENDLINE OF WEDGE = conn 9/11 & 9/21 which is pointing to 7900 for MON/TUE
I am more comfortable with the RISING WEDGE than the FLAG since the FLAG would already be 18 days in length which is a bit long. The RISING WEDGE is now in its 14th day.
Since this RISING WEDGE is mature and as long as the upper trendline holds then such implies that the pullback should start very soon, probably next week.
If it is a RISING WEDGE the highest that the DOW should get before pulling back is 8200-8250.
My SHORT-TERM TECHNICALS are now at 70, so they are in the upper-mid range approaching OVERBOUGHT(80). Just from a mathematical calcualtion my short-term technicals will get to CLASS SELL STATUS within 1-3 days, with upside potential of 150-350 points.
My SHORT-TERM TECHNICALS and the RISING WEDGE are in sync for the time being. Now also tie in the FOMC MEETING on TUE and YOM KIPPUR ON WED - it appears that the top of this upswing should arrive around TUE/WED.
I feel that even if the action by the FED is acceptable to the market, the top should still arrive on WED, and the downswing to start immediately of shortly thereafter.
If the action by the FED is viewed negative then the selloff should start immediately after the announcement.
For Monday, feel that the market will move up or at least flat.
Im not saying that this is the beginning of a huge pullback, just that it should be the beginning of a pullback that should retrace at least 50% of this upswing that started at 7400. If we get to 8200, but no higher, the forthcoming pullback should get to at least 7800 on the downside.
If we break the UPPER TRENDLINE of the RISING WEDGE (approximately 8200-8250), then I need to re-evaluate the situation.
seeya |
