Market consolidating...What's next?

After months of the S&P 500 forming the same pattern of rising to a trendline, then falling, then rising again, we now have the markets trading sideways for the past several weeks.

Long Term Secular Bear and Bull Markets

Here is a chart of the Dow Jones Industrial Average going back to 1900. See any patterns emerging here?

Fed Statement causes volatile trading session

Is the S&P 500 in an upwardly trending channel?

When looking at a chart of the S&P 500 since July, when another major leg up in the market had started, it looks like the market is simply in an upwardly trending channel. However, when you look at the S&P 500 since the march lows, the pattern that emerges is an ascending wedge with a break to the downside.

So, the question is, how long do you hold onto a particular pattern before trying to identify another pattern forming? True to form the bearish ascending wedge seen since the march lows did have the markets turn negative, and we had a 5% correction, but now it looks as if the uptrend is still intact.

This uptrend might be tested with the initial unemployment claims tomorrow, and the non-farm payrolls report on friday.

Technical Chart Patterns

Here we see Boise Inc. (BZ) in an upwardly trending channel, which hit resistance at $5.60 and then reversed. The reversal was not entirely negative, however, as it formed a falling wedge, which is actually a bullish pattern.

Sure enough, the falling wedge broke to the upside, after which there was sideways consolidation. Yesterday Boise reported good earnings as well as a successful debt restructuring program.

Investors get whiplash as they are tossed about

With the stock market having an inverse correlation with the dollar, every time the dollar moves upward the stock market plummets. Volatility is spiking quite dramatically.

Has Coldwater Creek (CWTR) finally found support?

Coldwater Creek (CWTR) may finally be finding support after falling over 30%. The bulls were caught in an ascending wedge that broke viciously to the downside. There have been a lot of stocks showing that pattern lately.

Coldwater Creek's net profit(loss) has been improving the last two quarters, but their sales revenue has still been declining. They are going to report earnings at the end of this month. It will be interesting to see if they can swing to positive earnings per share.