Dow Jones, Nasdaq and S&P 500 indices: Perfect Head'n'Shoulders!

Discussion in 'Trading' started by jamis359, Jan 18, 2008.

  1. Yes, you see head and shoulders patterns from time to time on individual issues but never for the entire market! This is incredible and is a serious signal for more declines to come.

    The chart speaks for itself:


    Also note the "death cross" -- 40 day MA crossing down under the 200 day MA.

    A lot of times you'll get a relief rally after the neckline is broken back up to the neckline, to be followed by another decline. We'll see. This is not good, folks.
  2. just curious, how come the 40 DMA and not 50 DMA?
  3. Habit. A lot of people use the 40, a lot use the 50. I don't think it makes much difference. The 40 will cross the 200 a little faster, though.