Experts Corner: the bull in the bear market

Posted by Drizzt
September 5, 2009

Carl Swenlin brings us his latest weekly technical picture update and i sort of agree that the long term trajectory will go close to vertical if it wants to break out of the ascending wedge:

What bothers me on this chart is the ascending wedge pattern, which looks more ominous from a weekly perspective than it does from a daily view. It is hard for me to imagine this wedge resolving any way but downward. I cannot picture in my mind a congruous price pattern that could result from an upside breakout. Once a correction is completed, more sensible possibilities could emerge. I guess this opinion falls under the heading of “gut feeling”, but it comes from a person who has looked at a lot of charts for a lot of years.

Experts Corner: the bull in the bear market 090904 lb 2

Bottom Line: Medium-term indicators are still quite overbought, and a correction would be the best way to clear this condition. Is entirely possible that we have seen the top of the rally/bull market, but medium- and long-term signals are positive, so I think the worst case we should expect for now is a correction. Our medium-term timing model will switch to neutral from buy if the S&P 500 daily 20-EMA crosses down through the 50-EMA.

[Read the full article at Decision Point>>]

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Carl Swenlin, Technical Analysis

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