Wednesday, August 06, 2008

Ascending Triangle Formation

The S&P 500 has officially created an ascending triangle formation.
In this situation, the price usually breaks through the upper resistance line instead of the rising bottom trend, so this suggests that the S&P 500 index will reach higher levels from here before resuming the bear market slide. It's good news if turns out that way, because I'll be able to get back in to SDS at a substantial discount to my selling price.

On another note, David Rosenberg at Merrill Lynch reported today that "300 point moves in the Dow only occur in bear markets." Thanks for echoing my earlier post, David!

3 comments:

Anonymous said...

How high do you think this rally will go?

HKoldmanin TW said...

Is it possible to make some bucks from SSO and hold it until Oct 08?

Jody said...

My only prediction for the rally's peak is that it probably won't be as high as May peak of S&P 1426. I'll just stay in cash until I see signs that the market has topped.

See my advice on short-term SSO positions in some previous comments.