Home > Short-Term Trader > Feeling A Little Deja-vu

Feeling A Little Deja-vu

Earlier this week I pointed out a couple of scenarios based on two possible chart set-ups in the S&P futures. One being bullish (Inverted-head-and-shoulders) and the other being bearish ("4th-wave-triangle"). The latter being the winner late Monday as we plunged into Tuesday's reversal low.

Well, here I am again pointing out another very similar set-up up on a slightly larger scale. First, I will note that H&S patterns and their inverted brethren can and often do become triangles. So here we are, with plenty of extremely oversold readings in the market. If you want to see them you can scroll back through recent postings……I don't want to beat a dead horse – we're oversold, we all know that.

What we don't know is whether this level of oversoldness (is that a word?) will lead to more oversold OR will the market finally catch a bid and honor the Inverted-H&S pattern? I will refrain from making any predictions and simply allow the charts to dictate my next set of actions.

Buying a break above the neckline on the I-H&S, Shorting a break of a Triangle, or a third option (not graphed) Do nothing as the market continues jetting lower from today's afternoon sell-off and either creating a double bottom at Tuesday's low or making a new low. While I am uncertain as to which one of these scenarios will come to fruition, I am certain that waiting for pattern confirmation (not predicting) will provide the best chance for making a successful trade.

Inverted      
T2

 

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Categories: Short-Term Trader
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