Stock Market Breakdown?

BY PGF
7 months, 3 weeks ago

The “Head and Shoulders” stock market pattern usually indicates a reversal of the prior trend in (a) stocks.

Charts are read from left to right. Here is an example illustration:

 

“The Head and Shoulders pattern is one of the most widely recognized reversal patterns and one of the most reliable bearish signals when found in uptrends, thus signaling the end of its [Bull Market] run.”

“The reason why it’s called a Head and Shoulders is because the first high (left Shoulder) and third or last high (right Shoulder) are both lower than the second or middle high (Head), making the pattern look vaguely like a silhouette of a person’s head and shoulders. A trendline can then be drawn connecting the lows after the first two peaks and extending it out to the right. This trendline is called the ‘Neckline’.” – Quote from a Zacks technical paper on stock market patterns.

Here we are in the S&P broad market index:

 

The pattern is circled, and a thin red line indicates the top of each shoulder. April 2020 was the Trump lockdown bottom. The market went up until September of last year; that’s when the pattern started to form. The second “right” shoulder appears to be developing now. It could break the second shoulder to the upside, continuing the bull market run. But things don’t look good; you know the macro; inflation, war, money printing, dollar losing global confidence, potential food shortages, etc. The market doesn’t always break down when this chart pattern prevails, but we just thought you might need to know that it usually does.

Edit: Read this SitRep on Europe over the weekend. WRSA laments; “Where Are The American-Sourced Discussions On These Issues?” Yep, reading Americans about the situation over there is a total waste of time.


Comments

  1. On April 8, 2022 at 12:25 pm, Dun said:

    American journalists have been probably the worst journalists worldwide since the ’60’s. They are lazy and overpaid, they lack basic grammar and spelling skills, and are on the whole entirely ignorant and disinterested in anything happening outside of the country unless it has domestic policy implications or features “important” people such as Prince Harry.

    You could actually say the same about most Americans.

  2. On April 8, 2022 at 3:18 pm, Joe Blow said:

    For those interested, there are ETFs and other investment products deaigned to go up in value when underlying assets go down. Many of the are also leveraged (so will suffer from decay). However, it is possible to make money on the way down. Look into inverse ETFs. I have a position in SQQQ at this time because I feel the NASDAQ will suffer greatly in the near to medium term.

  3. On April 8, 2022 at 4:11 pm, PGF said:

    This post is certainly not a recommendation to short or inverse the market. Just getting that said. It’s categorized under survival. But hey, you do what you want, it’s your money. Be careful.

  4. On April 9, 2022 at 12:52 am, Hudson H Luce said:

    Your “SitRep on Europe” comes straight from the Valdai Club, about which, some information: “The Valdai Discussion Club has a central role, hosting more than 1,000 high-level visitors from 63 countries between 2004 and 2018. Founded by the Council on Foreign and Defence Policy, the Russian International Affairs Council (RIAC), the Moscow State Institute of International Relations of the Ministry of Foreign Affairs of the Russian Federation (MGIMO University), and the National Research University Higher School of Economics, this entity is the intellectual muscle assisting Moscow in conveying its messages abroad. Leading foreign and Russian journalists, scholars, policy-makers and analysts, as well as top politicians including Putin and Dmitry Medvedev attend the Valdai Club’s annual meetings. It is widely believed that the Valdai Club conference held in 2008, in the aftermath of the Russo-Georgian conflict, was of critical importance in allowing the Kremlin to ease Russia’s looming international isolation (Institute of Modern Russia 2012).” https://thecrri.ca/research-paper/the-western-alliance-in-the-face-of-the-russian-disinformation-machine-where-does-canada-stand/

    You might as well consult the Russian Foreign Ministry, they’ll have the same viewpoint. BTW, “Pepe Escobar” is one of the big contributors for the Strategic Culture Foundation, one of Aleksandr Dugin’s projects, which has very close ties to Russian intelligence servives, as does Matthew Ehret, “Senior Fellow” at the one-room “American University in Moscow”… You might want to do a better job of checking your sources.

  5. On April 9, 2022 at 1:00 am, Hudson H Luce said:

    There are good sites to get good info on what is happening in Ukraine – here’s one, the English part of Meduza, which got run out of Russia since it refused to just run State propaganda – https://meduza.io/en

  6. On April 9, 2022 at 7:02 am, PGF said:

    Thanks for the info. I didn’t know about this, but It seems that you describe the Valdai Club to be a similar Russian equivalent to CFR. The object was not in taking a side.

    When the CFR here in the US speaks do you not listen? They tell you right up front what they’re going to do to you and your family. Do you dismiss the statements out of hand because of the source? It seems to me that if the group in Russia wield that much influence one might listen.

    I don’t know if Ukraine is going to be an isolated war or if the bear is on the move again in retaking eastern Europe. If it’s the latter you and I will be affected. When your enemy (if that’s what Russia is) speaks then you should listen.

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This article is filed under the category(s) Survival and was published April 7th, 2022 by PGF.

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