Well, my idea of more downside yesterday didn’t materialize. Instead futures decided to have a ramp-fest overnight (long before 3M and CAT announced their results, which is what “the news” attributed it too…) . Frustrating, but so be it. So what do we have now? Well, the DOW is right at the ascending trend line that connects the February low with the August low (purple line), as well as the descending trend line that has held any upside in check since the September 19 high (white line). Price needs to move above these two for more upside. Given that the DOW formed a rising wedge pattern off the February low, a retest of the wedge’s lower trend line can be expected. And this is what happened. Let’s see how price responds tomorrow. If the market keeps on ramping up like it has the past week, the count needs to be revised.
(click to enlarge)