Ominous Rising Wedge Suggests X=X 1,000 Point Collapse

29 avr. 2020

According to technical analysis theory the rising wedge points in the opposite direction to the breakout.

In this hourly chart of the coronacrash we can clearly see the rising wedge pattern formation.

This pattern also predicts that the length of the move into the wedge “X” is the same distance as the length of the break-out “X”.

Therefore X = X.

The downtrend into the wedge was a drop of 1,000 points, ergo the breakout will be a 1,000 point drop.
Caveat.
I have back-tested stock chart patterns and they are not 100% true, but in general, they are better than 60%.

That’s not saying much.

Mostly the direction will be set by the news, especially today with 2 big news items.
1. GDP Advance Announcement – Productivity in the Economy
2. GDP Spending – very important for the economy and sentiment, spending drives the economy

I expect both of these to be bad numbers, but will it be the start of the resumption of the much-needed downturn in the market?

Not necessarily.

The “Trump Pump” will be in full effect I am sure with a new announcement of stimulus designed to boost spending and therefore save the stock market.
It will be interesting to see if the technical analysis Rising Wedge is predictive in this case, or will ultimately fail because of government intervention.
I believe the monetary policy is now to encourage healthy inflation above 2% and keep interest rates at close to zero for the next decade, to ensure the debt burden is reduced over time. As Ray Dalio calls it a “Beautiful Deleveraging”.

An interesting day ahead, and be sure, the only thing that can save Trump’s re-election campaign is to ensure the stock market does not collapse, and he will do everything to save it.

Stay safe and like and follow if you want more.

Barry

29 avr. 2020

Note

Latest Headlines BBC - Up to Half of Global Workforce could lose jobs. Bloomberg - US Economy Shrinks at 4.8% Signalling Recession. THE STOCK MARKET RALLIES!!!!!! TRUMP PUMP

1 mai 2020

Note

Ouch, looks like a break of the Rising Wedge, on a vicious day of trading.

6 mai 2020

Note

Another fail to break the resistance day today...pressure is building