Hi Everyone
A Head & Shoulders or a Reverse Head & Shoulders … That is the question!
Some quite constructive patterns were being formed in the markets but remember, bearish markets can have powerful rallies, which then peter out!
Earnings season is upon us and results have been mixed. As such I’d expect the market to keep churning away and if I had to pick a direction, I’d pick south.
Now, here’s the dilemma facing traders who can’t sit still: are we seeing head & shoulders patterns (bearish) or reverse head & shoulders patterns (bullish)?
For me, all I’m concerned about is breakouts from clear areas of support and resistance. But let’s look the overall picture and see what sense we can make of it all.
Nasdaq (QQQQ) OVI Chart (Tuesday):
Remember, there always has to be a breakout/flag pattern with clear support and resistance as well. Looking at this chart I see a head & shoulders within a larger head & shoulders … that doesn’t bode well for the Nasdaq.
Dow (DIA) OVI Chart (Tuesday):
GS OVI Chart (Tuesday):
AAPL Chart (Wednesday):
Ok, that’s it for today … I’ve been saying for a while that my view is this market hasn’t yet seen its lows … That’s still my view. The last couple of months have seen some great trading opportunities with the markets behaving in a technical fashion to the downside. This recent rally will, I believe give us some more room to trade to the downside. But as ever, we’ll only trade what we see, ok?!
All the best
Guy
To learn more and have access to the OVI visit my Private Traders Club area.
