snippets - week ended 10 july 09, page-19

Hi Folks,

In the week-end snippets I said:

"Just something to watch – the XJO/XAO may be developing a downward sloping (bullish) wedge. There is some time yet for this to play out – but it is something to watch."

Well - the time might be approaching much earlier than I thought. Tuesday's action took the indices up to the upper resistance line of the falling wedge. Very close to a break out.

Volume has followed the classic pattern described by Bulkowski. Volume should fall as the pattern develops. Usually a break out occurs on increasing volume.

So, we are close to a bullish breakout on this pattern.

Here's an interesting anomaly. STW, the tracking stock for the XJO, actually finished above its down trending resistance line. So, on the STW, the pattern looks complete.

Are the STW investors a leading indicator? Time will tell.

Cheers
Red