Tuesday, April 21, 2009

World's Most Infamous Rising Wedge





Today's action reeked of severe short covering. What's behind all this? Possibly that everyone went short on the break of this obvious rising wedge pattern? I don't know, but it's not a stupid question. A few days ago, i talked about how obvious this wedge was, we might break down from it to suck in more shorts and then shoot higher! But right now, this pattern at a critical point in my opinion, what happens next few hours/days will determine the validity of this pattern that many are watching. Volume was VERY heavy today on these reversals. Something doesn't smell right. We are either gonna explode higher soon from short covering or we are reverse back down and tank hard like we did yesterday. It is very tough to call here. Volume supports the bulls, pure technical analysis supports the bears, shortterm at least. Bottmline, we need more evidence...

7 comments:

Anonymous said...

Excellent comment!! It's hard to know how this shit is gonna play out.

But the Huge revearsal on many financials and the V turn on the XLF suggests that this could be more than a simple pullback. Volumen on XLF was also heavier than yesterday. JPM with a huge revearsal, same as BAC, C, that opened on panic Sell -13% to close +10%. Reallly amzing revearsals today.

But the pattern is still there and we need to take 8200 clearly to leave the Bear Case.

Blue said...

The only thing I can think to watch is to see if it reverses back down on a retest of that lower trend line (bottom of the wedge) on the S&P. Then the pattern is failed and confirmed.

I like what Tim Knight said. Tomorrow we vote. 1) for Monday 2) for Tuesday

Stewie said...

i like that blue. monday or tuesday. it was really was a weird start to the week. i think it's better to be a spectator now, then guess which way it'll go.

Cliffynator said...

I'm still calling "Market Witchcraft". I think the rising wedge was a self-fulfilling prophecy. And now that it happened, the market f*ckery shall resume.

Let's see if we retest S&P to 875, or if we even start a channel down.

At least FEED's still rockin'! Good call, Stewie.

Stewie said...

thnx cliffy.

fizzy said...

stewie, some enlightening info on the leveraged & inverse ETF's can be found here:

http://zerohedge.blogspot.com/2009/04/truth-about-dead-cats-and-etfs.html

if you get caught against the trend in one of these things, your own capital will be used against your position.

i/o/w you'll be digging your own grave with a turbo-charged backhoe.

all the more reason for the stewSTOPS.

Greenlander said...

got stopped out of 87 SPY puts at 4.0
entry @4.2
now they are at 3.5 yikes

SPY volume is pretty big for this time of day.
Not quite the bear party yet.

Blog Archive