Saturday, November 24, 2007

Patterns On Indicators

The chart below tells quite a story about the short to intermediate term potential of the S&P 500 and it needs to be monitored closely as we have once again reached a crossroads where equity prices have the potential to break either way!

Although the odds are pretty heavily favored in the direction of an upside breakout, we need always be prepared for what the market throws our way.

Patterns that we can draw on indicators are very very reliable, about 3 times as reliable as patterns that are related to price only. This wedge pattern that is drifting lower has about an 87% probability of breaking higher and price will come along for the ride.

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