Stock Market Technical Analysis Blog
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In the market today, the huge head and shoulders pattern in the S&P triggered sending the market down 1.5% for a total of 3% down from my 8/2 blog correction call.
- Chart 1: red line shows neckline of the head and shoulders pattern, the king of all market top patterns, with a big drop today as we broke thru the neckline.
- Chart 2: the 9 month uphill channel of the S&P shows that the head and shoulders pattern in chart 1 caused a drop out of the steep channel that has been taking it up.
- Chart 3: shows how we also fell thru the 50 day EMA line today
- Chart 4: shows that today's drop took us out of the declining correction channel, which more often than not buys us time with sideways movement to get back to the channel but somewhat less likely this time as the selling was heavy all day today right into the bell.
- Chart 5: shows how we caught the lower line of the channel from earlier in the summer. Hopefully, that will hold and this will just be a 3% correction but if we slip thru that line, it's a long way down to the late June low (shown with the horizontal line).
Trade well my friends
Alan
