Tuesday, May 25, 2010

Possible Expanding Triangle

A lot of EWT followers are now calling for continued downside but as a trader one has to consider all possibilities. As a cautionary note there could be an expanding triangle in play with the first peak in January, second peak in April and the possible third one. The fact today's low was just a tad lower than the first valley and the extremely oversold conditions gives support to this scenario. As a matter of fact, if that turns out the case it would be a text book expanding triangle which btw is typically found in the 5th wave. I am bearish until proven otherwise but the fact today's low was exactly at a trendline from March 09 is suspicious.

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