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When was the last time the S&P 500 fell 15%? It’s been three years! Speaking of three years, three years ago this past week the Power of the Pattern shared that the world was creating look alike bearish patterns at resistance. See here What happened after the post? By October of 2011, the S&P 500 was 15% lower.
The above global 4-pack reflects that these index’s are up against key resistance lines of bearish rising wedges, as the applied volatility on the VIX is hitting the lowest levels ever recorded (not shown).
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The above chart reflects that 5 of the last 7 Mays, the Russell 2000 has reached a high and given back some gains. At this time the Russell is breaking below support of this bearish rising wedge.
Can global markets break resistance? Sure they can, anything is possible! These patterns do suggest caution when it comes to portfolio construction until resistance is taken out!
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