Wednesday, January 13, 2016

Is A Big Short Approaching? S&P 500 Is Drawing A Giant "Head and Shoulders" Pattern

A few days ago I presented the so-called "Head and Shoulders" pattern, drawn by Apple stocks.

Today let me show another "Head and Shoulders" pattern - this time this pattern is much more important because it is related to the broad stock market, represented by an index S&P 500.

Before the previous bear market in stocks (2008 - 2009) S&P 500 drew a similar pattern:


Today the market looks like:



The pattern has not been filled yet. To do it, the index has to fall below 1,875 points.
If such is the case, shorting the broad stock market should make sense.

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