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The NYSE Composite and Wilshire 5000 index COULD BE forming one of the
largest “Bearish Head & Shoulders” patterns in the past 100 years and IF they, in fact, are then we are about to see a 40% decline in those indices and the S&P 500 would most certainly follow suit. Take a look at the charts that tell the story. Words: 184
So says Chris Kimble (http://blog.kimblechartingsolutions.com/) in edited excerpts from his latest post* entitled Is the “Largest Bearish Head & Shoulders” pattern in 100 years in place?
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.
Kimble goes on to say, in part:
Odds are low that I am correct on this pattern read and that it will take place but ….”Its NOT THE ODDS of something happening that is key, its the IMPACT IF IT DOES!”
The 2-pack of charts:
CLICK ON CHART TO ENLARGE
Conclusion
IF the read happens to be correct, however, the impact would be large because Head & Shoulders topping patterns usually trade at least back down to their necklines and the necklines are more than 40% below current prices!
[That being said it must be noted] that the Dow is at the top of a 70-year channel [see chart below] and is attempting to break support of a rising wedge. The chart depicts “Monthly Closes,” which means we won’t know if the Dow really broke support until the end of the month!
CLICK ON CHART TO ENLARGE
To learn more click this Massive Head and Shoulders Analysis youtube video:
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*http://blog.kimblechartingsolutions.com/2012/11/is-the-largest-bearish-head-shoulders-pattern-in-100-years-in-place/
Readers of the above post may also enjoy Kimble’s post today on the propects for the S&P 500, as follows:
S&P 500 bulls best hope support holds right now!!!
CLICK ON CHART TO ENLARGE
An important “Dual Test of support” is at hand right now for the [S&P] 500 index. Long investors best hope it holds, because the support line off the 2009 low is very important! FYI- Support is Support until broken!
Twice over the past 12 years, the [S&P]500 index broke support lines of these rising wedges at (1) in the chart below and prices fell off quiet a bit.
CLICK ON CHART TO ENLARGE
The above chart reflects how important it is for the “Dual Support to Hold” in the top chart at (1) to hold!
*Source of the above post: http://blog.kimblechartingsolutions.com/2012/11/sp-500-bulls-best-hope-support-holds-right-now/
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
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