They say if you like Sausage, “you shouldn’t watch it being made, due to its an ugly process.”  Speaking of Ugly, the Wilshire 5000 had created an ugly pattern,  first published on 7/27 (see post here), prior to a very Ugly month of August

The chart below reflected that a “Head & Shoulders topping pattern looked to be in place at channel resistance.”


Below is an update to this key broad market index… “Should we be surprised by the last 5 weeks?”



Downside action coming off a “Head & Shoulders” topping pattern should not come as a surprise.  Don’t be caught off guard or surprised by the downside action if the 11,700 level is taken out either! 

 The “Power of the Pattern” was suggesting that a “Look Alikes, Dominoes and Slipper Slide” situation was at hand back in May, reflecting that the world had created bearish patterns, and if one went a they would all fall like Dominoes and then the majority of investors if they remain long, would endure a slippery slide event in the equities markets.  (see post here) . 

The August 19th low in the Wilshire remains as a key support test, which at this time REMAINS IN PLACE!!!  If the 11,700 support level can’t hold the odds go through the roof that a “Great Escape 2″ has arrived! 

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past