Monday, April 25, 2011

Ascending Triangle

The market didn't really do much today and it seemed like a Wave 4 in progress. So the 5 wave count I had on Friday could probably be a 5 waves within a 3 Wave and we're consolidating here for another bigger push. Also, the market is staying inside the potential Ascending Triangle I posted last week and it could break out from this pattern on the next push. I still favor a push to test resistance or make a marginal new high and then go into a correction to test the TA and/or the rising trendline on the Ascending Triangle before breaking out. I closed my short position today at a minor profit and waiting to see another bullish wave to short or the correction to go long.

On a side note, I twitted an article on China pursuing diversification of their holdings into Gold and Oil and that supports the view of much higher prices in the longer term. The thinking is the dollar will continue to lose purchasing power and countries around the world will follow in parking their money in commodities and precious metals. Which in turn, will drive prices not only to new highs but maybe even create a bubble in this asset class. Gold has gone up 10% since I posted the buy signal in February on the blog and I will add Oil and silver entry points on the next pullback. In the future, I will cover these trades as it seems like we're about to see a major bullish wave on them.

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