There are few waves in southern California as legendary and ruthless as The Wedge, which occasionally kicks up in Newport beach.
The wave is a result of man made barriers on both sides of the beach which serve to collide sets of incoming waves. The result is a wave face that rises up like a skyscraper and instantly crashes down with the force of two massive walls of water.
The behavior of that wave is a great natural example of how I expect the wedge currently forming on the Dow Jones Industrial Average to behave.
Traditional technical analysis considers an ascending wedge a bearish pattern, which is all the more reason for it to surprise investors with a massive blast up-and-out of it. Sort of like this:
I have no intention of playing the blast up. However, the rip higher is what I intend to catch, on the short side, and ride like the legendary boogie boarders of Newport beach.
With the right timing and a little bit of luck, I might just get the ride of the season.
TBD
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The proverbial launch off the cliff.
Nice post, Raul.
I’m doing a turtle roll with a small short and ready to get big short for the big A-frame on the way. Banzai, dude.
waiting for the gap fill first?
All hail the WEDGE!