On May 8th we discussed lesson #1,764,328…
That lesson would be: When you think you see something in the markets and your methods have been working do not be unduly influenced by things you see on the internet, especially short-term (60 min. or less) chart patterns put forth by…
…a group in which you are [I am] included.
It was in regard to having seen 60 minute charts of SPY and XLV showing ominous Head & Shoulders patterns put forth on the internet. And wouldn’t you know that the little SPY H&S did eventually break down, only to screw bears that acted upon it.
Two things here: 1) The Big Mouth in Chief and the Fed Chief are actively in this market and they can change a chart in a nanosecond. 2) Chart patterns are unreliable enough on longer time frames but on a 60 minute or shorter view, they are even more so.
Side note: I am interested in that wedge or potential ending diagonal (we’ll see if it actually ends anything if it breaks down) on SPY. There is that policy-instigated gap at 286, after all.
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