[smartads]
For most chartists, users of technical analysis, the wedge is a pretty common and favorite pattern for most. Mainly because the flight of a stock price conforms nicely to how they move. Combine that with easy to notice price targets and stop points, you can start to understand why people love the pattern so much.
Not coincidentally all three major U.S markets are flying in a pretty average wedge pattern. Briefly, for those that don’t know, the main goal of wedge pattern is to watch the stock funnel out until its forced to breakout one way.
There are specific bullish and bearish wedges, but you can learn more about that over here. For now, we’ll jump straight into seeing exactly where the markets stand today over a year time frame.
Dow Industrial Average
Kind of depressing when you see we have been on a constant uptrend for most of 2009, yet we are still just about even… and perhaps heading lower. The Dow has to pick a direction soon, lets see which way it breakout. See my 2000 point prediction for the Dow.
Click to enlarge image
Nasdaq
Unlike the other 2 markets, the Nasdaq has been on a tear for most of 2009, but just like any steep slope comes the possibility of a quick drop. It will be interesting to see what happens here as we close out 2009.
Click to enlarge image
S&P 500
This chart pretty much replicates the Dow’s almost exactly, so the same analysis goes; however, there seems to be some more “trading zone” room than in the Dow. I would guess the reaction of this market will lag that of the Dow, so watch there and then expect that happens here.
Click to enlarge image
If you like this type of analysis, then you’ll want to learn more about wedge patterns and other technical analysis tools.