Thursday, December 29, 2011

Waiting on a Breakout - Likely Down

 Click on Chart to Enlarge

See the chart above for notes.  The upside moves in stocks have been technically counter trend with respect to the ADX indicator.  I think this suggests that the next breakout move will be down. 

Click on Chart to Enlarge

Also a large triangle is forming after a downward move.  Most triangles break out in the direction of the prior trend.  I have no good reason to believe this one won't break out to the downside.

In either case, expect a MAJOR market move starting within the next week or two.  If you are positioned against the trend, it will likely go very badly.

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