Is it just me or does it feel like the stock market is toying with us? Although all the different time frames don’t really give us any information, the shorter time frame seems to at least have some signs of life. Whether they are good signs or not has yet to be seen, but maybe we can figure out what each would result in.
Lets dive in, shall we?
I pulled up a one year Dow chart. You will see below that it looks the perhaps the market is starting to consolidate, which should be a good sign.
A falling wedge has formed, which is another good sign of a possible trend reversal; however, a more intriguing story is the fact that the wedge support almost sits parallel with a pretty huge and game changing support. So while a break downwards out of that wedge is bad news in itself, compound that with the fact that would also mean a break of a substantial support.
Lets not get all gloomy though. If the Dow can somehow (I emphasis somehow) manage to break through the resistance of the wedge (marked by the high orange arrow), then dare I say we make a quick run to 9300?
So to sum it up:
- Break through wedge resistance – target is 9300
- Break through wedge support – target is 6600
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