In August, I posted some comments on silver, http://tradercraig.blogspot.com/2010/08/last-chance-for-silver-to-fall.html where I laid out the case that silver had to fall almost immediately or the silver bears would be in trouble. I think we are at the same place with stocks. The count is different and the reasons are different, but when we have a nearly completed count that should lead to a selloff that doesn't happen, we have to be prepared for the opposite to occur. In this case, it would be a strengthening rally in stocks that lasts the rest of the year.
Tuesday, October 26, 2010
Ascending Triangle Becomes Ending Diagonal
The ascending triangle pattern was invalidated and has morphed into an ending diagonal triangle. I have relabeled the critical levels. The Qs cannot exceed 52.86 or the EDT as I have shown it is extending. I think we have reached the edge of the chart for the bears. Either this thing reverses tomorrow or Thursday and starts to sell off in a meaningful way, or the bears might as well throw in the towel and get long at the first opportunity.
Posted by R. Craig Pritchard at 6:46 PM