From the graves of the fathers of technical analysis Edwards
and Magee “Technical Analysis of Stock Trends”:
Pg 186 "In a Rising wedge, there is no evident barrier
of supply to be vaulted, but rather, a gradual petering out of investment
interest. Prices advance, but each new up wave is feebler than the
last. Finally, demand fails entirely and the trend reverses. This,
a Rising Wedge typifies a situation which is growing progressively weaker in
the technical sense."
Pg 188 "...in many cases, they rise clear to the apex,
and in some, they actually go a short distance beyond, pushing on out at the
Top in a last-gasp rally before collapsing. Once prices break out of the
Wedge downside, they usually waste little time before declining in
earnest."
SPX testing FROM BELOW the BROKEN lower ascending wedge
trend line from March 9, 2009:
http://www.screencast.com/users/Virginia_Jim/folders/Jing/media/d23cc0ef-7731-4195-a225-d856e31c516b
QQQQ testing FROM BELOW the BROKEN lower ascending wedge
trend line from March 9, 2009:
http://www.screencast.com/users/Virginia_Jim/folders/Jing/media/9be74d80-d4a7-41c7-9080-6adbdf4fe475
Price must drop to more than 3% of the price at the point of
the break to confirm.
If the breaks confirm, the October 2 low will not be a major
resistance IMO. I expect the first real resistance will be the August
low. And I expect the next 3 weeks will see the July 11 low tested and
provide a meaningful bounce. All just an opinion in the face of a still
very large bullish trader population climbing their ‘wall of worry.’
Jim