Two days before the Wilshire 5000 fell 17% in 8 days, I shared that a huge opportunity was at hand at (2) in the chart below. (see post here)
CLICK ON CHART TO ENLARGE
The Russell 2000 and the Wilshire 5000 seem to be creating quality patterns that one can use towards finding key exhaustion/reversal points.. The Russell seems to be influenced by prices back in 2008 (see Russell Double pattern) The Wilshire above created a very quality “Head & Shoulders” pattern and the H&S seemed to have an impact as the Wilshire declined 17% in 8 days, after a Right Shoulder breakdown.
This broad market index closed this past Friday, at the lows coming off the right shoulder breakdown, testing the early August lows as support. Not only is that low being tested, a couple of other key support lines have come into place at (3), after the index ran out of gas at its 38% Fib resistance level.
At this time…the media is doing an A+ job discussing how bad things are…yet this broad market index reflects that it is very near the same price it was 2 MONTHS AGO!
Rodney Dangerfield made a good living talking about ”I don’t get any respect!” I hope investors continue to respect the “Power of this Pattern” per if this support line (Which IS STILL IN PLACE) gets taken out, a good numbers of investors will jump the fence and head for the hills.