A man stared at the chart below and made an update for subscribers a little while ago. Now, being a man who stares at charts who wants to be something more than a man pretending that shapes and patterns on a single chart warrant the time of serious and busy people, the update included much more. It cross referenced some key sectors and tied in technical, macro fundamental and sentiment views. It laid out a rational game plan (IMO).
Okay, so now that’s clear. Any dope can spot a potential H&S (or death cross or trend line break or…). So then, let’s spot this potential H&S and take it for what it is. Let’s note that this potential H&S conveniently measures to the 2019 target. But if this scenario plays out the building of a right shoulder will by definition involve still higher prices in the near-term.
Another point, which I neglected to include in the subscriber update, is that there are significant bearish divergences by MACD and RSI from the theoretical left shoulder (January market blow off) to the higher high (Head). That’s important to the bear case and improves the bearish odds for H1, 2019.
Let’s also throw NDX up here and see what it’s up to. Say, it’s got a chance to form a dreaded H&S as well. And the beauty part is that it can rise to form a legit right shoulder while still not breaking back into the former channel. Oh and there is that indicator divergence again. The summer was a real grind upward in these indexes and it came with lessening momentum. That may well mean something one day, looking back in hindsight.
We’ll be doing a lot of work in NFTRH to validate and/or negate current market views. We’ll inform said views with new information as it comes in. The market is fun again after last summer’s grind to nowhere. But for now, consider what this man who stares at charts is staring at in the pictures above and see what you think.
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