The Black Box

[LG]

mjk: we had the rising tops and bottoms that the bears have been calling a bearish rising wedge

You don't have to be a bear to call the formation a bearish wedge. My career has been based on not being a bear or a bull. I just work at trying to be on the right side of the moves where ever they take me.

Some patterns are more reliable than others, but not one pattern is 100%. IMO, it is possible the in-play patterns could fail rather than break to the norm, especially given the recent increase in the money supply. However, I have to defer to my timing methodology, but I am being more cautious than normal.

While it is true the NASDAQ Comp moved above its rising wedge, the process put the Index into a fairly overbought state. Also correct is that the $COMPX has dropped back down and closed above that previous rising resistance line, which so far has provided some support. However, the NDX while having moved above its similar rising wedge resistance line has dropped well back inside the wedge.

Looking at the NYSE based Indexes, The $NYA.X (NYSE Composite) tagged its wedge's rising resistance line and turned, the $SPX.X (S&P 500) managed a penetration of its wedge's rising resistance line, but is now well back inside.

The $RUT.X (Russell 2000) came close but did not actually tag its wedge's rising resistance line. So, it remains inside.

The recent move up, pushed all of the above referenced indexes into a very overbought condition per my OB/OS models. And they remain in or near overbought ranges per my daily and weekly models. I would like nothing more than for you to be right and for the markets to finally begin that launch next week, but I suspect “them what hold the price stamps” are in accumulation mode for spell.

All of the above referenced indexes are fairly oversold per my intraday models. I will be surprised if we do not see at the least a consolidation beginning Monday, possibly as late as Tuesday. My expectation is that we will see a retrace of this move down with the minimum being a rising consolidation.

Per my work, I believe “the boyz” are in accumulation mode and they are going to need lower prices to induce the selling required to restock. My WAG is, once their coffers are restocked, we will see that next move up...

LG

Disclaimer: The above is my opinion only and I reserve the right to be wrong. An overall market expectation is just that and should not be used in exclusion of the evaluation of individual equities or other investment instruments. Never base any investment decision solely on any one person's views or analysis, especially an anonymous message board poster such as myself. Do your own research and take responsibility for your own investment decisions. And, always use stop loss points.