FinancialAdvisor's College Class (FACC)

[AnderL]

Rising Wedge IMO

An ascending triangle and rising wedge are very close in formation but there are some distinct differences in how they need to form.

Rising wedges are almost always bearish in that buyers become sellers very quickly as they try to eek out a profit before the rally dies. This weakness in bulls means that sellers eventually win out and pulls the whole thing down. I mean who is willing to buy in a break off the previous top only to find that the stock trades sideways and back down. It’s a bull trap.

The ascending triangle is assumed to be mostly bullish but is dependant on where it forms. A break of an ascending triangle where the stock is trading near or at its 52 week high is considering to be bullish, in a bullish market only improves the chances of the break out. You would rather see an AT in an uptrend.

Your ascending triangle is forming at a low and a break will be met with resistance that it needs to chew through to get out form its bottom. That does not mean that it won't happen, but the chances become slimmer. Many people like ATs but I don't bat an eyelash when watching them as they are more likely to fake a break based on various internal and external pressures.

I would consider the INDU and COMPQ as having more of a Rising Wedge patterns like Gold and the USD. The NDX may be an anomaly but we shall see if it is able to pull the other indices up when it breaks or the other indices pull the NDX down.

It's not about biases but the probability of it happening. If your assumptions are that I'm biased to be bearish because I post here you may be mistaken because I have been bullish on several occasions while here.

Also of note is that larger patterns, support and resistance trump these smaller formations. If there truly is support going back over the last few weeks providing the bottoms on that ascending triangle then there is a greater chance of breakout. Also watch for the descending channels from the sell off over the last month. I don't think it’s quite done yet.

Thanks for your opinions. They are greatly appreciated.