--Brian Shute (Vision Quest)
Early in the week US stock markets were working hard to negate head and shoulders patterns that have been tracing across major indexes for the past 2-3 months. A surprise ISM number on Tues found the Dow rallying to marginal intraday 4 yr highs. AAPL's heaviness proved a useful tell, as by end of day much of that rally had been erased.
Since then it has been the bears' turn, punctuated by ~1.5% decline following a weaker than expected payroll number this morning. As the chart shows, bulls were able to contain the damage in early March and early April. However, head and shoulders patterns are likely construed as bearish because it's difficult to defend a third time.
Should the line of defense fail here, then technically the downside appears to have room to SPX 1280ish.
position in SPX
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1 comment:
Technical analysts have noted that consumer staple and consumer discretionary sectors are posting all-time highs and are emerging as new leaders in a bull market.
Yet upon inspection each sector pulled back over 30% the last two times they set all-time highs in 1999 and 2008.
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