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Sometimes getting “Picky about small details at tops and bottoms” can be of huge benefit to a portfolio.
S&P 500 continues to test overhead Fibonacci resistance. Last summer (week ending 7/8/2011) while dealing with the 23% Fib level, the 500 index on a weekly basis, created a “weekly chart pattern” that soon saw the 500 index decline almost 20% in a matter of two weeks!
Last week the 500 created a similar weekly pattern at (2) as it did the week of 7/8/2011, up against falling resistance line (1) and the same pattern as it did on 10/12/2007!
Are the points the “Power of the Pattern” brings up “True But Useless” pieces of information? Humbly I don’t know, yet I do feel it can be worth being very picky from time to time!
Uncle Fib? Don’t forget about uncle Sam and his partners at the fed who have major influence over the investment banks and have had an official policy of propping up the stock market to boost the economy.
Wildcat…Great comment and observation.
Speaking of IYM, the action in the Copper ETF JJC is acting a little soft after hitting its 50% retracment line and filling an overhead gap.
Dollar is attempting to test a steep falling resistance lines. Agree that if this line is taken out on the upside, 500 & IYM are going to be under pressure. Not sure what can change this positive momentum, yet ole Uncle Fib has been known to be the key from time to time.
If the dollar index can close above 79.45 (yesterday’s high), it would put more pressure on the market, especailly iym. Currently it tentatively breaks above the downward trend line from 1/13/2012. Meanwhile, the vix and tlt charts are staging a breakout.
However, the strength of the market has been amazing. The overbought condition gets corrected mostly in a sideway type of correction.
re: 60 min
yesterday put in a lower low
possible lower high forming now…
Great catch on the pattern in those three instances. I’ve been watching this closely as the S&P 500 definitely seems on the cusp of a turning point.