DOW Breaks 8200 (Confirms Head And Shoulders Pattern...The Next Crash Has Commenced)

Incredible Charts ^ | 7-7-09 | By Colin Twiggs

[waus]

The Dow broke through support at 8200 to complete a head and shoulders reversal. Confirming earlier warnings, from breakout below the rising trend channel and from bearish divergence on Twiggs Money Flow (both 21-Day and 13-Week), the pattern signals a down-swing to test primary support at 6500.

[waus]

If the DOW breaks through the March low of 6469.95, then somewhere between 5000-4000 is very possible. I guess the market isn't crazy about Marxism, Communism or Socialism, whatever you call what this country has become overnight.

[B-Chan]

Burn, baby, burn. The faster the Crash comes, the sooner we can rebuild.

Hunker down, live frugally, pray.

[3catsanadog]

The Dow broke through support at 8200 to complete a head and shoulders reversal. Confirming earlier warnings, from breakout below the rising trend channel and from bearish divergence on Twiggs Money Flow (both 21-Day and 13-Week), the pattern signals a down-swing to test primary support at 6500.

Forgive me but I'm not savey when it comes to things and jargon financial. I have absolutely no clue as to what that statement means. --------------------------------------------------------------------------------

[ABQHispConservative]

I think it means, take your money out before it goes up in smoke. Of course by announcing such a lower limit, it becomes a self-fulfilling prophesy.

[2banana]

Except this time it will be the double head and shoulders!

Patterns are always easy to see after they happen!

[randomhero97]

So what’s the bad news? /s

[Attention Surplus Disorder]

1: A so-called “head and shoulders” pattern is considered among the more reliable technical indicators of price action in a market.
the model:
http://www.chartpatterns.com/headandshoulders.htm

the DJIA:
http://finance.yahoo.com/echarts?s=DIA#chart1:symbol=dia;range=3m;indicator=volume+stochasticfast(50,20);charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

look similar?

2: (one form of) “Divergence” in markets is based upon the observation that “volume confirms price”, or stated differently, “volume MUST confirm price”, or stated differently, “price [rising] UNconfirmed by increasing volume is suspect.” When we see price rising [upslope] but money flow falling [downslope] then we look at the chart of price vertically aligned with volume and see a “<”. This has been occurring verrrry slowly, very sneakily, over the past several weeks in the stock market, and has been flagged as a warning sign that the rally from the March lows has gotten “tired”. (Oh, gee, it was only only up just shy 40%, the biggest or second biggest “rebound from a suspected capitulation low” seen in history.)

[blam]

"Hunker down, live frugally, pray."

Yup and collect and hoard.

[familyop]

"I guess the market isn't crazy about Marxism, Communism or Socialism, whatever you call what this country has become overnight."

It's not crazy about the globalism that accompanies corporate socialism, either. That's why I say, "Let it crash!" Moreover, let the defaults come! We need new government, business and academic leadership!

[Lilpug15]

And if Obama passes a second stimulus? He apparently doesn’t need congress anynmore and could just promote a stimulus czar.

We will continuously create bubbles and head and shoulder bobs, prolonging a recession before the worst of it much like FDR did w/ his progressive commie meddling.

The worst period of the depression era was in 1937/38 when unemployment reached approx. 17%

[KoRn]

I’ve read this very same analysis by some folks over on Karl Denninger’s ‘TickerForum’.

Now may be a good time to cut your losses and pull out of the casino if you lost a lot in the market from your retirement earlier this year and gained it back.

[Attention Surplus Disorder]

If the Yahoo DJIA chart doesn’t look so nicely-formed H&S to you, try this one, for SPY = Spyders = proxy for the S&P500:

VERY clear on this one.

http://stockcharts.com/h-sc/ui?s=spy&p=D&b=5&g=0&id=0

[Arguendo]

That’s because it’s BS. If there was anything to these technical “indicators” anyone who knew them could make millions (for a short time) and they would quickly cease lose their predictive power.

[Niteflyr]

Burn, baby, burn. The faster the Crash comes, the sooner we can rebuild. Hunker down, live frugally, pray.

Sage advice....nothing could be worse than a protracted creeping socialist decline...

[Niteflyr]

It's not crazy about the globalism that accompanies corporate socialism,

That's the other problem....this idea of globalism...doomed to failure...

[eekitsagreek]

Oh well, what used to be my 401k is now down to just 4.

[qam1]

So this “Head and shoulders reversal” thingy is worse than a Dead Cat bounce??

[foolishboi]

You my friend, are obviously not familiar with the technical side of trading.

[icwhatudo]

DJIA is down 5,000 points since the dems took back congress.

[eekitsagreek]

DJIA is down 5,000 points since the dems took back congress.

Has the GOP ever mentioned this as a reason why one should never vote for Dems?