The NYSE Composite and Wilshire 5000 index COULD BE forming one of the largest “Bearish Head & Shoulders” patterns in the past 100 years and IF they, in fact, are then we are about to see a 40% decline in those indices and the S&P 500 would most certainly follow suit. Take a look at the charts that tell the story. Words: 184
So says Chris Kimble (http://blog.kimblechartingsolutions.com/) in edited excerpts from his latest post* entitled Is the “Largest Bearish Head & Shoulders” pattern in 100 years in place?
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.
Kimble goes on to say, in part:
Odds are low that I am correct on this pattern read and that it will take place but ….”Its NOT THE ODDS of something happening that is key, its the IMPACT IF IT DOES!”
The 2-pack of charts:
CLICK ON CHART TO ENLARGE
IFthe read happens to be correct, however, the impact would be large because Head & Shoulders topping patterns usually trade at least back down to their necklines and the necklines are more than 40% below current prices!
[That being said it must be noted] that the Dow is at the top of a 70-year channel [see chart below] and is attempting to break support of a rising wedge. The chart depicts “Monthly Closes,” which means we won’t know if the Dow really broke support until the end of the month!
Readers of the above post may also enjoy Kimble’s post today on the propects for the S&P 500, as follows:
S&P 500 bulls best hope support holds right now!!!
Posted* by Chris Kimble on 11/13/2012 at 5:56 am.
CLICK ON CHART TO ENLARGE
An important “Dual Test of support” is at hand right now for the [S&P] 500 index. Long investors best hope it holds, because the support line off the 2009 low is very important! FYI- Support is Support until broken!
Twice over the past 12 years, the [S&P]500 index broke support lines of these rising wedges at (1) in the chart below and prices fell off quiet a bit.
CLICK ON CHART TO ENLARGE
The above chart reflects how important it is for the “Dual Support to Hold” in the top chart at (1) to hold!
*Source of the above post: http://blog.kimblechartingsolutions.com/2012/11/sp-500-bulls-best-hope-support-holds-right-now/
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
The U.S. economy is careening toward a fiscal cliff. Europe is stuck in a financial abyss. China is economy, a bastion of strength for the last decade, is throttling down. Given this less-than-rosy economic backdrop, how could I possibly predict that U.S. stocks are poised to rally as 2012 comes to a close? Glad you asked….Here are 10 reasons why I’m taking such a contrarian stance. (Hint: I saved the most important reasons for last). Words: 1420
In the financial world, the month of October is synonymous with stock market crashes. So will a massive stock market crash happen this year? You never know. Hopefully we’ll get through October (and the rest of this year) but, without a doubt, one is coming at some point. The truth of the matter is that our financial system is even more vulnerable than it was back in 2008 and, as such, many financial experts are warning that the next crash is rapidly approaching and that those on the wrong end of the coming crash are going to be absolutely wiped out. Let’s take a look at some of the financial experts that are predicting really bad things for our financial markets in the months ahead. Words: 1634
Based on the latest S&P 500 monthly data, [my analyses indicate that] the market is overvalued somewhere in the range of 33% to 51%, depending on which of 4 indicators I used. This is an increase over the previous month’s 31% to 48% range. [Let me explain the details.] Words: 475
“Portfolio managers have been swayed by hope over experience” when it comes to anticipating the effects the fiscal cliff will have on markets. Investors aren’t giving as much attention to the fiscal cliff as they should be, and that may be helping to set the markets up for a repeat of last year, when the debt ceiling negotiations sent stocks plummeting.
Back in April and May, it looked like the economy was falling apart, the euro was going to come unglued, and stocks were going to plunge. Sentiment was extremely bearish and volatility was jumping. Now in August, you can’t find a bear anywhere on Wall Street! Me? I continue to be worried about the likelihood of a sharp market decline this fall for several reasons which I share with you below. Words: 495
The six factors discussed in this article suggest a near-term peak for equity markets, avoiding fresh exposure to equities at these levels and selling some of one’s equity holdings. Long-term investors can still ignore the volatility and buy quality stocks, however, it would make more sense to buy the same stocks after the markets decline 10%-15% than buying it at current levels. [Let me explain more fully.] Words: 665
Renewed leadership by the sectors that stand to benefit most from a stronger economy and profit growth down the road…could be one of the best indications that perhaps the worst is indeed behind us and the rally has more room to run. However, if these cyclical sectors fail to participate more fully, that would be a signal of more potential trouble ahead. [Let me explain.] Words: 840
Harry Dent, the financial newsletter writer and CEO of economic forecasting firm HS Dent, has one of the most bearish calls on stocks we’ve heard in a while. Appearing on CNBC yesterday, Dent explained the demographics-driven thesis behind his Dow 3000 call.