Replies to post #5637 on MDA - Market Direction Analysis (MDA)

[hk2]

I agree

[royg1927]

It is a good idea to draw both on the chart and consider that the expected result of a declining wedge may take place within the declining channel. I would be very hesitant to say "right" or "wrong". The market may have failed to read the answer page in the back of the book.

[ajtj99]

Augie, you're correct in your methods. That's one thing I am grateful to LG for ..... drawing trendlines fundamentally.

[LG]

Augieboo: I would draw the top line of the falling wedge from the pivot high on 12/2/02 connected to the high on 1/13/03 and extend right. However in this case, the falling resistance line you have starting from the high on 1/13/03 connected to the high on 3/3/03 is a legitimate resistance line. However, I would use the first line to illustrate the wedge.

Not all trend lines (support and resistance) have to be part of a formation. Sometimes there is no valid formation. A mistake some make is trying to force price action into a pattern that does not exist. Then he or she will be looking for possibly the wrong expected outcome and at possibly the wrong inflection point.

Regards,
LG