I've been noticing for a week or so now, what seems to be a second shoulder on the SPY. I'd like to know if anyone else suspects the same or am I miss-interpreting? If you look at the daily, the left shoulder started in late Nov last year and we are rounding the right shoulder. You have to admit the market is rounding into a downtrend. What do you think? Is the market gonna do a major correction? Does that pattern not qualify as a HnS?
Last edited by danyzuko; April 20th, 2015 at 04:32 PM.
So far every down move in ES gets bought up _ in overnight no less, there is no followthru even to the Vix. Vix over 18-20 range has been a great buying signal so far. Just a slow churn up going on. Asset classes are changing and so is leadership in those . Unless you have a spike down with some followthru hard to be bearish at all. So far every time fed dangles the carrot market drops and things correct from overbought and it gets back on the bullside.
Well no I wouldn't expect a crash from it, but certainly a long term opportunity for a 6 - 12 point downward move. But you guys are right. I'm just considering that unlikely event. The market is very strong and will mostly likely bounce off the 50 as usual.
I've found head and shoulders and technical patterns to be really unreliable in ES. It is such a big market with so many headfakes, that I think you have to be in tune with the fundamentals of that market, such as institutional money flows, corporate actions, etc. Chart patterns are more reliable on an intraday basis, but on the daily, it doesn't seem to work well.