Gone Fish'in
by
, 08-04-2011 at 01:20 AM (2695 Views)
08/04/11
Not really, but I am trying to take some time off this week with some family in from out of town.
We saw a nice intra-day reversal yesterday as the Dow closed up about 30-points after seeing some deep losses earlier. That's good but the market was so oversold that a rally was not a surprise. The question is going to be, should investors sell any rally or are we forming a bottom to this correction?
I saw that one of the top headlines on the Drudge Report was about the nasty head & shoulders pattern we talked about yesterday. I am always leery when the mainstream is talking about technical patterns.
The headline was actually a link from CNBC called:
Scary Chart Pattern Suggests More Selling on the Way
Here is the chart they posted.
As mentioned yesterday, we are looking at the H&S pattern as well, but now that it is making the non-financial news, I am leery.
Do you remember last August when we got an ominous Hindenburg Omen signal? That is normally a very bearish sign, but Glenn Beck was talking about it on his TV and radio shows and I back then I said:
"We still have that dreaded Hindenburg Omen signal to worry about, which has preceded every market crash since 1985, and 77% of the signals preceded sharp sell offs. If there is a silver lining to this signal, I saw it mentioned on the Drudge Report and the Glenn Beck program this week. That could be a sure sign that this signal won't work this time."
That was August 28, 2010 and look what the market did shortly after that signal.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Not too bearish. So now that this H&S pattern is on Joe Sixpack's mind, it may not turn out as bad - at least that is the theory - as we would normally expect. I guess we shall see.
I've go to run. Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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