April 16th, 2009 at 3:21 pm
Quick Note as I leave town for a few days. Last Sunday night I wrote about 870 - 906 being an important zone of resistance and that we should see that level by end of this week/early next week. Well, we’re almost there (high print is 869.17 so far). Longs should think hard about shedding some length very soon. To be honest, I’m not sure what the pattern is from the 666 lows–It’s a little confusing to me. But, what I can state is that the last few weeks are beginning to resemble a “rising wedge” formation, which is potentially very bearish. One thing is for certain, pay attention to that uptrend line. If it gets violated at all, then exit the market post-haste. When rising wedges get broken to the downside, they have a tendency of producing VIOLENT moves lower.
I can’t recommend massive short positions just yet, because I’d rather see some “peaking” action first…either an identifiable little 5 wave move down on intraday charts, or a break of that uptrend line.
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