charting skills up or down? , page-2

Ok I'm going for B (UP).

Ok, a few things to look at here. Notice the classic pattern of lower highs each time the market tries to rally up to the descending trend line, and big support right near the 10c level.

The best follow through out of an ascending or descending triangle does not take place towards the apex of the triangle, it takes place about 2/3 of the way from the left side to the apex. Which is where we are at with IDC.

As the pattern progresses too far towards the apex, the psychology changes. It had become evident toward the right hand side of the triangle that the bears just don't have enough firepower to push the market below that big support level. The longer the market is in the lower right hand corner of that pattern, the more bullish it becomes. When you are looking at patterns like this always pay attention to the psychology behind not being able to break through that big support level on the third our fourth touch.

Also notice the volume. A classical ascending or descending triangle will see the volume decrease as it moves towards the apex. Why? Because the traders holding that big level decrease in number each time. Eventually when there are no more buyers or sellers left to hold that line, it breaks and you get the expected move. We see something very different here in IDC. At the lower right hand corner of the triangle you see an increase in volume signaling that there is more fight from the buyers, not less.

These types of patterns, where the market gets squeezed into the apex can produce very powerful moves in the opposite direction. Why? Because the longer the market spends down at that lower right hand corner, the more shorts pile in. When they can’t force it below that level and the market rallies above the downtrend line, the shorts scramble to cover.

This pattern is a little different from the falling wedge pattern, but similar in many ways. They both exhibit a very similar psychological pattern in that the bears run out of steam.

Is the spring coiling tight? Thoughts?