Hi Marty, just trying to learn why do you think the recent price action in the Nasdaq since Monday is not considered a bear wedge pattern vs the one after the second leg down? Is it because the volume is higher this time?

Great question!

After a steep 18% drop from 21,110 on February 18 to 17,238 on March 11 the index started to slowly rise on lighter volume. The low of 17,238 to the top of the wedge at 18,281 was only 6% and it took two weeks to move. This is textbook bear wedge action.  This resulted in another leg down.

The recent move from the low on April 7 of 14,784 to the high of 17,202 is 16% in just three sessions. That move was accompanied with massive volume. That is not our typical bear wedge action. This looks like a washout at the lows and there are no more sellers. The buyers stepped up in a big way. The Nasdaq now needs to trade above that 17,202 high from Wednesday April 9. It has some work to do still.

Regards,

Marty