A Descending Broadening Wedge

Technical Analysis

Let’s take a quick look at the S&P 500 lately:

I added two lines here which show the downtrend the market has been in since the start of the year. In technical analysis terms, this is called a descending broadening wedge.

What’s that mean? I don’t really know. But technical analysis tells us that it is bullish! Seems a bit surprising right? I would’ve thought bearish.

Basically, technical analysis would say that we are either going to have another decline for a bit to continue the broadening wedge to the downside or we will breakout and have a bull run.

Do you trust technical analysis? I don’t really. It’s just fun to look at charts with lines though and think about what they might mean.