Best of the Week

Things Getting Ugly for Stock Market Bulls

Stock-Markets / Stock Markets 2011 Nov 17, 2011 - 01:08 PM

Best Financial Markets Analysis Article SPX has clearly emerged out of its Diamond pattern formation and, technically speaking, has nothing but air to the bottom of the charts. This is a perfect crash set up. Since the SPX reentered its original Broadening Wedge formation, it may still be under the influence of that Broadening Wedge, which has a target below 1000. In fact, there is some argument that we are now entering the crash phase of the initial Broadening Wedge.

That brings us to the second broadening formation, which I have named the Broadening Flag formation. The target for that formation is enumerated at the bottom of chart. The Broadening Flag formation is doubly confirm by massive head and shoulders neckline at 1074.77.

Options week has the effect of adding accelerants to the fuel already provided in the market. If the decline accelerates, we may achieve the lower target by early December.

The NDX is still working on its original Orthodox Broadening Top formation. Wave two has ended with a bearish broadening wedge formation, bearing a target of 1832 to the downside. There is no technical support until 2119.33, which may only provide a minor bounce. Although there may be some perceived support at 2034 two 2042, the real support may actually be the lower trendline of the Orthodox broadening top formation or, at least the head and shoulders neckline somewhere below 2025.

Things may get nasty very quickly, so hold on.

Good luck and good trading!

Regards,

Tony

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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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