Technical analyst agree that a falling wedge pattern is a bullish pattern. As a pattern, its bullishness just stays dormant until the breakout occurs.

It is a great pattern for technicians because its failure rate is only 10% which means it has an accuracy level of 90%.

So why are we discussing this pattern today?

Because there is now such a pattern ... a nice, two and half month long pattern.

That's the good news, now for the not so good news ...

The pattern is showing up on the VIX (Volatility Index). As you know, the VIX is often regarded as the Fear Index and the VIX moves in the opposite direction of the stock market.

Therefore, this normally positive news pattern has some very negative implications attached to it. Technically, for this particular pattern, the maximum run time before the breakout is during the third week of February. However, that is when the apex of the resistance and support lines is formed.

The reality is that these patterns always breakout before the apex. Seldom is that breakout longer than seven-eights (distance) into the pattern which would be about February 8th.

The beginning timeline for a probability increase of a breakout starts after being two-thirds into the pattern ... and that date was January 23rd. So now, we are in the breakout window area where the probability for a breakout will increase as time moves toward February 8th.

Bottom line ... market risk levels will now start to increase as we move forward. (FYI: This chart is one of three VIX charts that are updated daily in Section 4 of our Standard subscriber site.)

Send This Page To a Friend

By Marty Chenard
http://www.stocktiming.com/

Please Note: We do not issue Buy or Sell timing recommendations on these Free daily update pages . I hope you understand, that in fairness, our Buy/Sell recommendations and advanced market Models are only available to our paid subscribers on a password required basis. Membership information

Marty Chenard is the Author and Teacher of two Seminar Courses on "Advanced Technical Analysis Investing", Mr. Chenard has been investing for over 30 years. In 2001 when the NASDAQ dropped 24.5%, his personal investment performance for the year was a gain of 57.428%. He is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools. As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL. He is an advanced technical analyst and not an investment advisor, nor a securities broker.

Marty Chenard Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.