I’d like to ask readers for some open discussion and comments on this week’s market chart. The long term chart for the S&P500 seems to have expanding upper and lower peaks & troughs. I’ve marked them on the chart. Expanding patterns are typically bearish. The implication of the pattern is that volatility is increasing (the swings are getting wider).
I’m fairly agnostic about this chart’s interpretation. That’s because the weekly (mid-term view) chart, beyond the US government-inspired fear-trade that’s going on now, is looking bullish. On the other hand, Thomas Bulkowski, in his wonderful book “Encyclopedia of Chart Patterns”, notes that the pattern on average tends to predict a bearish market about 75% of the time.
I’d be interested in hearing your opinions on this chart – do you place any credence on a mega-long termed pattern like this, or is it not something you would consider to be of concern – i.e. “Damn the torpedoes – full speed ahead!” (Admiral David Glasgow Farragut 1801-1870)?
Comments are welcome.
Keith on BNN
Here’s the link to a Globe & Mail article with my top picks from the show: here.