Big rallies mean a bear market is about to start?

biggestupdaysof2014bearralliesoct21

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Regardless of the asset, some of the biggest rallies often take place during bear markets, NOT in bull markets. Many suggest the reason this takes place is massive short covering, hence a short covering rally.

My friend Ryan Detrick shared this chart with me, which reflects that yesterday was the biggest up day of the year and four of the top ten gaining days this year have taken place this month.

This is NOT enough data to confirm anything at this point. I do feel it could be something to pay attention too, since the ole bear has been sleeping for several years!

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Eiffel Tower pattern keeps putting downside pressure on 3D systems!

 dddeiffeltowerpatternchannelsupportbreak22

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3D systems (DDD) was one of the hottest stocks on Wall Street from the 2009 lows to January of 2014, up over 4,000%! 

The Power of the Pattern in January of this year shared that DDD looked like it could be in trouble and investors should harvest holdings in DDD as it looked to be forming an "Eiffel Tower" pattern. At the time of the posting, DDD was breaking short-term support (see post here)

Since that posting in January, DDD has declined around 50% and now it is breaking below its multi-year rising channel. 

IMHO, companies in the 3D field will have an outstanding and positive impact on our lives going forward. That does not mean that the Eiffel Tower pattern is completed putting its downside pressure on this stock.

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Mid-Caps breakout of bullish falling wedge, acting strong!

 mdyspyratiofallingwedgebreakoutoct21

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I shared last week with Premium members that the Mid-Cap/SPY ratio appeared to be oversold, at support and looked to be creating a bullish falling wedge, which was a good place to go long MDY with a stop below support.

At the same time it appeared that the Russell 2000 was in a similar bullish situation, as I shared that small caps were due a rally one week ago at See It Markets, a day before the key reversal wicks took place last Wednesday in SPY & TLT shared on Stocktwits (see reversal wicks here) 

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