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April 24, 2008

Summer Soiling

The 1400 level on the S&P was vigorously defended today, but we seem to be on the verge of completing an inverse head and shoulders pattern.

stock chart

I mentioned in today's earlier post that the recent consolidation zone projects us to 1420. Well, the HS pattern projects us to about 1530! If you personally know any die-hard bears, buy them some packs of fresh boxers to replace the ones they'll be soiling over the summer.

Anyway, let's not get ahead of ourselves. This pattern has to complete first. Whip out your Edwards & MaGee and remind yourself that a head and shoulders pattern must break the neckline on low volume to be valid. If we are, indeed, heading to the 1500s, there will be plenty of time to jump on board. I want to see 1400 conquered and back-tested before I lay down my chips.


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