Mark has been engaged in a lively discussion on the bet we get a pop here. I am more in the drop camp, here are a few points. Note the big picture view of the 3 phases of the bear market. We have of course been in phase III for a long time. Since October according to my analysis. Its a process as we all know. I could write pages on it and Gartley does a great job of it in his writings from the 1940″s Well here is what I see. Note the major consolidations in the bear get shorter and weaker. That of course makes sense. Also note how they start to tilt down as they no longer can sustain the energy to advance. Since we broke down out of the H&S from the beginning of this year this current consolidation is a defending triangle. The weakest of all consolidations. Its my judgment that its a bearish triangle and will drop out the bottom.
Now where else have we seen this? Well knights lets go all the way back to 1907 and look at that bear market. Take a look at the series of consolidations in this bear market…same thing, each one kept getting weaker and more tilted downward until the last one was a defending triangle. And price just dropped out the bottom in a crushing phase III resolution. That’s my guess how this one plays out. Oh and that triangle was two months duration same as this one