lee, I would say that if you look at any chart long enough, you can find a bullish read, or a bearish read. You can "cheat" paramaters slightly to fit your criteria.
Technical analysis is not foolproof. Many indicators are lagging. That's why I prefer CCI, which incorporates cycles based on historical time periods, and ADX, which simply shows trend strength, as confirming. I look at rsi and stochs to find extremes, but I pretty much ignore macd except in the case of indexes, and m/a's except for short term ema's.
A research group did a statistical study several years ago on H and S patterns. The results were exactly 50%, breakout as opposed to breakdown. My point being, when a chart pattern reveals itself, I then look for multiple confirming technical indicators. But yes, you can draw the lines any way you want to. ON that same DJIA chart, I could just as easily have drawn a rising wedge, the same wedge with the same peaks that is on the Nas and S and P at current time. The difference is, the nas and sp have stayed within their range of negative divergences over the past 18 months, while the DJIA has moved out of them. As I posted last night, that might be due in part to the weighting of energies in the dow vs. technology in the Nas, and the recent strength of that sector.
Time will tell. But as always, I buy beat up undervalued shit and sell it when it goes back up. And I short overbought overpriced crap and wait for it to go down.
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