Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Tuesday, May 19, 2009

Classic Chart Pattern Predict Bad News Followed by Good News

Chart pattern suggests that the market will move lower over the next six weeks.

I received in my email an article by Rick Pendergraft pointing out the three levels of resistance that might keep S&P in check for next few months.

One of the striking thing on the chart is the symmetrical move from the neckline to the head and from the head back to the headline. Each of these moves lasted nine weeks. It doesn't have to be that well defined to fit as an inverse head and shoulders pattern but the formation is obvious.

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