So, that got me thinking -- When has the conventional wisdom every been right? Or more precisely, what is the contrary view to that concept right now?
Below are three charts of the SPYs, IWMs and DIAs. They are yearly charts. Notice that they are all head and shoulders patterns. The standard way to trade this pattern is to buy when prices cross the neckline. The standard measurement tool is for prices to rise from the neckline to a point that equals the distance from the top of the head to the neckline. Assuming that to be the case, we've got a rally coming.
Now -- we just had a rather historic head and shoulders breakdown a few weeks ago. So -- consider these charts.
2 comments:
The longer-term reverse H&S patterns you highlight ARE curious, but I don't know enough about them. Do the volume indicators conform to the standard expectations? Should they prove to be valid, how high a climb does history suggest we should expect?
Oops. I see you answered my second question in your original post.
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