This is very bad for short sellers. The potential reversal pattern could have failed a month ago, we raced to the top for the 4th time, went through the horizontal resistance, made a pullback and now we are going to pierce through the final resistance line. This can be a big continuation pattern.
Note
If this is a continuation pattern, it should reverse at some point soon too because stock prices are crazy high or not?? The problem with Technical Analysis is that it can't predict the future in the real world, it works well only in textbooks.Note
On the chart above, you can see that we are spending too much time at the resistance line. There is too much congestion there. The index really wants to break out, and we also closed high on the weekly chart. SP futures are down after hours, so the index is drifting slightly lower, but it can easily reverse and power up next week. Once that resistance line is cleared, big short squeeze may happen. I know, we (the smart people) want the market to tank because it should, but this chart scenario shows a different reality (at least for now).Note
One more thing. So many people here posted "SHORT" ideas, much more than "LONG" ones. This has bothered me because it is contrarian.Note
Anyways, We will know what happens next week. It will be a crazy week. Short/Long.. is a 50/50 chance given the price action on the chart. I don't like this chart. Too much risk either way Long or Short.Note
Looking at this again. This is a perfect textbook example of a failed Triple Top. Shallow third leg down. Sharp reversal. Fast raise with gaps to the top for the 4th time, going through the horizontal resistance with a gap. Pullback and close on the high for the week. Now, are we going to clear the final resistance line? If we do, by the TA theory, there will be a big move upwards caused by a Big Short Squeeze. I think it is bad news, because the stock market should crash now instead of inflating into even a bigger bubble that will explode with even bigger bang.Note
Few days later after rate cut, this analysis is no longer valid. Index reversed making this triple top more likely a valid reversal pattern. One needs to remember that Technical Analysis is a Hocus Pocus Analysis. You can only tell what pattern you had way after it is too late to act on it.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.