You may recall last year when I was posting the BULLISH RISING WEDGE pattern on the Dow chart, I believe aurum and myself were the only ones that were bullish on the Dow at the time. The chart below is in linear scale and shows that bullish rising wedge as a true halfway pattern. For those folks that don’t have a measuring tool you can just subtract the 2002 low at 7200 blue arrow, from the 2004 high at 10,750 point A = 3550 points to get the length of the 1st leg up. Now all you have to do is add the distance of the 1st leg up, 3550 points to the 4th reversal point on the bullish rising wedge at B to get your high for the total move at 14,235 at point C. What that measured move tells me is that the counter trend move up was a bear market rally and with the break of the the black uptrend channel and the old high at 11,750, it is getting time for another 2 to 3 year move down. Except for a small counter trend rally back up to backtest the 11,750 area, the primary downtrend of the bear market should be getting ready to exert itself again to the downside.
All the best…Rambus
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