Scary Chart Pattern Suggests More Selling on Way...

Scary Chart Pattern Suggests More Selling on Way...


The much feared Head and Shoulders pattern.
"There have been a few head fakes with this pattern since we came off the 2008 lows," said Scott Redler of LT3Live.com.
He said the S&P started forming the pattern several times, but it was never triggered.
"That's why nobody trusts this pattern, but it feels different this time."










Ok. That's not the real one.


] The high was 1370. The neckline would be an average of 1270. That gives you a measured move for technicians to pick an area to buy. That takes you down to a zone of 1150 to 1180," he said.

"That correlates to a pretty big support level from last year. That will be the level traders are watching," he said.

Edited by Rogerdodger, 03 August 2011 - 06:19 PM.

Now you KNOW it's not a head and shoulders pattern!

This is almost becoming a religion with the number of analysts pointing to this pattern now...and not one of them have a volume component on their charts.

Sad.

Fib

Scary Chart Pattern Suggests More Selling on Way...


The much feared Head and Shoulders pattern.
"There have been a few head fakes with this pattern since we came off the 2008 lows," said Scott Redler of LT3Live.com.
He said the S&P started forming the pattern several times, but it was never triggered.
"That's why nobody trusts this pattern, but it feels different this time."

I believe there is a typo in the article. With that "Head and Shoulders" pattern, he's talking about "a few head flakes."

Edited by milbank, 03 August 2011 - 06:46 PM.

Maybe we have a new pattern discovery here, "sheddin' holders".

This morning I saw Art Cashin was all pumped up and red in the face talking about the neckline breakdown and target of 1120. Then I noticed the NYA and SPX RSI was at 29.24 and 29.50. A point where many lows are put in on your chart. And wouldn't you know it, the market did a slow zoom up to get out of that area.... Plus NYLOW closed at 191+55. I'm thinking a low was put in. But I'll be a little more sure by the next full moon the 13th... Or when my weekly $NYSI turns up. So not confirmed yet for me. But am dip buying.

Chart patterns are sooo last century.

You are right, Nav. Chart patterns and their volume profiles as a guide to predictability were derived
in the day when human beings were trading, and their waves of fear and greed could be
seen, and and perhaps exploited.

Now, the humans have largely been displaced by juiced bots which act somewhat differently than people do.
Its the dawning of Age of Aquarius, dontcha know.

Edited by selecto, 03 August 2011 - 07:11 PM.

Too scary to be true

Chart patterns are sooo last century.

You are right, Nav. Chart patterns and their volume profiles as a guide to predictability were derived
in the day when human beings were trading, and their waves of fear and greed could be
seen, and and perhaps exploited.

Now, the humans have largely been displaced by juiced bots which act somewhat differently than people do.
Its the dawning of Age of Aquarius, dontcha know.

Yes but, I think machines had their first conscious awakening on May 6, 2010

Now you KNOW it's not a head and shoulders pattern!

This is almost becoming a religion with the number of analysts pointing to this pattern now...and not one of them have a volume component on their charts.

Sad.

Fib

A head and shoulders pattern is just a new high that falls back to the previous low and then puts in a lower high. You can find tons of these if you run the proper scans. The problem is that most people just watch price and don't look at indicators (volume, momentum, etc...) to determining the probability (of a breakdown) it is a genuine Head and Shoulders top and not just temporary weakness.

Maybe it will play out as people expect. The price action appears more complex than just a Head and Shoulders...

I recall the same thing just before the flash crash low. We broke the neckline and bottomed 1 day later

Edited by orange, 03 August 2011 - 07:24 PM.

Chart patterns are sooo last century.

You are right, Nav. Chart patterns and their volume profiles as a guide to predictability were derived
in the day when human beings were trading, and their waves of fear and greed could be
seen, and and perhaps exploited.

Now, the humans have largely been displaced by juiced bots which act somewhat differently than people do.
Its the dawning of Age of Aquarius, dontcha know.

Yes but, I think machines had their first conscious awakening on May 6, 2010

Machines actually sold everything in sight. Among them is QID (double inverse QQQ) which hit a low.