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Traders appear to have created bearish Head & Shoulders patterns in the Copper complex and Europe. Each asset in the 4-pack above reflects a similar pattern, as each looks to be testing their neckline! Even though each of these assets are lower than their 2011 prices, should the neckline be taken out, technical analysis textbooks would suggest they would move much closer to their 2009 lows.
Each of these assets has bounced off of the current support lines over the past two years.
We live in a time, where assets are highly correlated/ move together…diversification has muted effects! The world needs these necklines/support to hold! A year ago patterns around the world all looked the same and they all moved in concert, to the downside. (see look alike patterns May 2011)
Risk assets across the board need these support lines to hold!
I am not a Bull nor a Bear….Just attempting to share what the Power of the Pattern appears to be saying. Remember these patterns are not created by me, they are created by investors around the world!