DJIA 0.31% 26,683 dow jones industrials

houston, we have a problem

  1. 15,850 Posts.
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    A wise old man once told me (and has constantly reminded me since) to always study volume when considering chart patterns. I have been studying the charts for weeks now trying to work out where we are headed. I have considered many patterns, some even bullish, but the volume never quite sat right with me.

    But now it has become clear.....we have another rising wedge just as we did in July. The early october fall was heavy so a technical bounce was on the cards. Within 2 days we were oh so very close to a 61.8% retrace but on that same day we fell heavily to end the day at the top of the rising wedge.....and the dow has been in that wedge ever since.

    Now before another chartera jumps on me and states that the wedge is converging too quickly let me say this : yes it is touch and go with the rate of convergence but study the volume carefully....for me this is the overriding factor. The only days the vol was well below the descending trend line was when the dow was making its way to the top of the wedge and the only day the vol exceeded the line was the day before yesterday when the DOW hit the bottom of the wedge with a loud CLUNK!!

    It should only be a matter of time now before the DOW breaks south of the wedge.

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