Here is an illustration of what may be a potentially "bullish" development in the Dow Jones Industrial Average. The weekly chart shows what I think may be a descending wedge formation. This is occurring at a time when there is absolutely no "good" news being reported about our economy. Selling activity appears to have reached a point of extreme as shown by the Williams %R and MACD indicators, on decreasing negative volume. Everyone and their brother is calling for a breakdown to about the 5000-6000 level. If this pattern confirms and resolves to the upside, we could see the Dow rally back to above the 9000 level (40% retracement).
Does this mean our problems are over? Not necessarily, but from a technical perspective these are signs of which we should take note.
Disclaimer: The above information is not intended as investment advice. For specific investment advice consult your own financial professional.
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