Stock Market: Reverse Back Down Appears Very Close
Robert H Anderson | Oct 28, 2014 04:56AM ET
The charts are saying that we could "reverse" back down in the next day or two, because of a rising wedge pattern that started when the Dow went down 460 points on Wednesday October 15th.
Many of the common indexes including the S&P 500 and the Russell 2000 daily charts are showing this rising wedge pattern. I have included the Russell 2000 and the S&P 500 daily charts with this article.
The rising wedge is a bearish pattern that begins wide at the bottom and then contracts as prices move higher and the trading range narrows. When the index price gets closer to the apex or end of the pattern, the index reverses direction and heads down, usually with strong down momentum.
An interesting aspect about these current rising wedge patterns, is they will hit their 50 day moving averages right at the apex and also hit multiple resistance lines at the apex.
it all spells reversal and I believe this reversal could be the one when everyone realizes that the last market highs were the start of a "new bear market". Confirmation will happen when the 50 day moving average crosses the 200 day moving average on the daily charts. The Russell 2000 daily chart has already done that and is leading the way down.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.