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Dow Jones “Monthly Closing prices” remains at the top of its 70-year rising channel and is walking on a fine line of support at (1) in the above chart.
The Dow continues to create a multi-year bearish rising wedge (two-thirds of the time this pattern breaks to the downside). This pattern has to come to an end in the next few months as support or resistance will be taken out.
Will our political leaders come up with a great solution to the fiscal cliff and the markets buck the odds and break to the upside of this pattern? It could!
Odds are very high it will pay in the end to follow the breakout or breakdown!!!