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I wish it were that easy. That's what makes trading fun!
Believe me - if I had the exact answer as to what was about to happen (and not just odds and probabilities based on structure) - I wouldn't have blogged it and instead would have done just that - leveraged up on the next move and then gone to the Bahamas.
Take a look using a log chart.
Also, Monday we closed at channel resistance dating to Nov 4. I am betting that this channel will hold since it's defined by the lows of Nov. & March and the highs of Nov & Jan. Must use a log chart to see this channel. If the top of the channel holds, then we will end this wedge soon, IMHO. Thanks Corey for a great service! I love your site and visit every day.
As you must be aware already, there are confluence zones at 8064 and 8353. So logically, the 8064 level becomes the point where we should short it, and a few points above 8353, we should place a stop loss. Correct me if I am wrong. Thanks!
like your alternatives. good blog.
It's certainly open to interpretation!
Thank you for reading and for your comment.
That's one thing I tend to miss - log-scale chart patterns. Good call.
It's just so hard to bet against the bulls at the moment it seems - they're relentless!
That's my guess too at the moment but there could be something else going on.
You're right on - we see a volume divergence, a 3/10 Momentum Osc. divergence, overhead resistance, etc but the bulls refuse to cede ground. Friday could be a powerful day either way and - if earnings surprise one way or the other big - then we could see a breakout up or down from the wedge.
I have no possible way of predicting earnings, but wouldn't that be nice?!
Could be right - it's been difficult to count the waves in this move up so far - it was counting so easy until we broke the 805 highs. Breaking there triggered a few of my alternate counts.
The pattern will certainly be clear in hindsight but we have to do the best with the data we have now.
You hit my philosophy exactly - patterns are not magic. They 'work' many times because people see them and react to them, placing stops at predictable locations and entering trades at predictable locations. We don't know exactly what's going to happen, but the pattern, along with expectations of investor/trader behavior, help us quantify risk and establish larger targets than our stops, which builds our edge.
Nothing magical - just odds & probabilities.
It depends if one quantifies this as a Leading or Ending diagonal. Check out Andrew's comment on here for a background on the pattern.
Diagonals generally are expected to have a similar expectation to a rising wedge - it's bearish and we would expect a break-down once the lower trendline was violated.
Exactly, though the market has already broken certain levels of short-term Fibonacci confluence at 805. I would look to the February highs at 875 to be simple resistance which, if broken, could lead to a quick push to the January highs at 940.
I've decided the bulls have forgotten the meaning of the word 'resistance.'
Thanks for reading!
Andrew,
Thank you for sharing - I'll try to draw in these possibilities or provide some text from Prechter's book in an upcoming post.
I always appreciate your feedback!
Cheers
Precisely! If it were so easy, everyone would be doing it!