Reversal day could spell doom for S&P 500
- Posted by PeterLBrandt
- on October 31st, 2012
Top has been tested. Major wedge pattern now becomes the dominant chart pattern to watch.
The weekly S&P chart displays a large 17-month rising wedge pattern. The rising wedge is a classic bear pattern, resolved by a down move in about 70% of the cases. Notice that prices burst through the top boundary of the wedge in September and October, but could not follow through. This price action is known as a “last-gasp” blow-off.
The decline on the daily chart on Oct. 23 completed a 7-week triple top. The rally earlier today retested this top. Prices (as I draft this post) have reversed to the downside. If the market closes weak today, this price action would confirm the 7-week top and set up the rising wedge as the dominant pattern in play.
###
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
blog comments powered by Disqus
-
Peter Brandt entered the commodity trading business in 1976 with ContiCommodity Services, a division of Continental Grain Company. From his start in the commodity industry, Peter's goal was to trade proprietary funds. But, he first needed to learn the business. More » 
-
Archives
-
