Is The Bull Coming?

Both down targets set in our previous post on September 18 were reached last week in two successive days, on October 3 the Dow closed at 10,655 and the next day the intraday low was 10,404.


Now it looks like a bullish falling wedge formation was completed on October 6 with the penetration of the upper down trending line, if that is the case we will see the Dow rising with maybe a return move to the upper line before the take off.

Unlikely but possible, the Dow will retest the Lows before breaking the upper line for good. Anyway, the falling diagonal is most of the time a bullish formation.


What to do?

Wait for a decisive close above 11,250 or if you want to be really sure wait for a close above 11,600, before going long. If the bull is really coming there will be plenty of time to make money in the long direction.