GT Goodyear Tire & Rubber Daily Chart

Rubber and tires are a great economic bellwether. Housing and auto's drive the economy and cars need tires. In addition, all construction whether commercial or residentail, including roads and bridges, begins with excavation and this machinery uses large tires. CAT is hurting. Ditto the ag sector. So when rubber stocks falter that is telling you the global economy is weaker than thought. The GT chart is worth posting since it shows the dramatic collapses that can occur from rising wedges and remember that all chart patterns work in all time frames whether looking at a minute chart or a monthly chart, or an hourly chart or daily chart.

Price collapsed from 29 to 24, -17%, in only six days. That qualifies as dramatic. Note how the negative divergence (red lines) were universal making a top call an easy bet. The stochastics are oversold and positively diverged so that will create a bounce but the other indicators are weak and bleak so further softness is anticipated. The blue lines show a huge gap below and price is on an island above 23. If price comes down to 23 then collapses quickly to 22 and lower that would qualify as an island reversal pattern. Price will likely stagger sideways to absorb the initial shock of the downdraft. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.