Thursday, April 7th, 2016

Market forming Head& Shoulders Pattern?

Ahhh I dont think so. Time will tell, the pattern is not complete yet, and may take several days of trading to be claimed as properly formed H&S. Once formed you will see if this pattern breaks below the neckline or not or fails. The patterns itself is not a guranteed bear market omen, its the follow through of this pattern that counts. For now, let’s see if SPX is trucking along this downward sloping bullish channel.

NDX has that channel and it broke out yesterday -but failed today with more advances to the upside.

The earning season is now coming to an end and it is possible other worries may get the market. This is most dull trading season of the year and it is laced with vacations and travel among well heeled traders. That is why those volumes suck. There is not much going on, but low volumes can be deadly, because there are not enough buyers out there. The market can cascade down even with very little volume. Something to remember when initiating long positions.

GOOG is again in a channel as you can see in the video. It manages to flow like a river for a week or two and than blasts off. but GOOG does have defined Head and Shoulders pattern , please take a look. It if breaks 870 and does not bounces from 863 it can land near 850. Caution is needed here with this stock.

The money has been flowing into AAPL which has managed to climb above 500 and above its 200 day moving averages. But AAPL has lot of overhead resistance on the left side of the charts. Those people who invested their life’s savings over the years, and lost, will be ready to dump stock as it moves higher. No doubt AAPL has burnt many investors in last 12 months or so. It was a darling stock and you get the feeling nothing will go wrong- but it did and got crushed beyond repair.

The market direction is sideways to lower these days, just watch out.

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