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Are Rising Wedges a cause for
concern?
Historically, most rising wedges are 5 months
long or less. These rising wedges are 29 months long.
Just
over half of the rising wedges have a pullback. So far, these have all had a
pullback on the DJI, NYA,
and S&P ... in other words, they failed the
wedge's support, went down, and then moved backup to the resistance
line.
The S&P's Rising Wedge chart below has a classical formation
appearance.
On all the rising wedges studied that were 5
months long or less ... there was a 90%+ down-further success
rate if it
failed after the pullback. We don't know two things right now. 1. Will
these historical statistics
apply to a 29 month wedge? ... and 2. We don't
know if this rising wedge will "fail its pullback" yet.
Right now it is
sitting right on its pullback resistance line.
That
brings up the third possibility ... some rising wedges have failed and then
continued on after a pullback
to rise to the apex (meeting point of both
resistance/support lines) and then have made a serious drop
of around 20%.
Some have gone down much further. If this turns out to be the case, then the
latest
it would take to get to the top of the apex is the end of this
September or the first week of October.
The Rising Wedge for the DJI will
peak on October 12th.
This Wedge resistance test is as
important as any Major test has been, so be cautious and watch
these wedges
carefully in the coming days. If you want to share today's update with
a friend or relative,
I have provided a link below that you send them the
link to this page.
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