From yesterday, on the SPX:
"Since yesterday was such a strong day, I'd like to see some give back, then a breakout, but I don't get to call the market ;)"
We got some give back. The SPX still is trading within the pattern in black. This pattern still could "morph" (change) into a Bull Flag if the SPX makes a "lower low" than the low at Data Point #2, which was the May 15 low of 878.94, or it simply could fail altogether.
Let's say that the pattern fails, and that the SPX goes down to the bottom of the Kumo (the vertical lines), which currently is at 771.21, or even back to 741 November low. That would be about a 20% haircut off the SPX 930 high. And, let's say that the general market sells off a similar amount. Where would that put bullish stocks, like POT?
A 20% haircut for POT would put it back at the top of the channel (horizontal green line). As long as that would hold, the two targets in the low 120's still are IN PLAY.
POT has had a big move, so a consolidation of those gains while forming a bullish continuation pattern would be healthy. I drew a Bull Flag (pattern in blue) as an example.
3 comments:
Melf,
Just wondering if I did this calculation correctly.
873.37 target for SPX D?
http://jegejigs.blogspot.com/
Good Morning, Jeg,
Yes, you did a good job. That would be a Bull Flag if we should get it, and it would be deceptive because it would violate the 875-877 neckline of the Inverse H&S.
Melf,
Thanks.
It's always nice to hear from you.
I agree. The 873.37 target is deceiving since it violates the 875.63 swing high.
However, this could also be viewed as a volatility expansion of the bull flag.
SKF looks like it has a bear flag.
Also, still watching that VIX dead cross too.
:)
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