All the major indices appear to be on the verge of tracing out a major continuation pattern: The Head & Shoulders. While often thought of as a reversal pattern at tops or bottoms, H&S is also a continuation pattern.

Nasdaq (1 year chart) Head & Shoulders Formation?
click for larger chart
Source: Fighting the Next War
Elections not always good for stocks
Crippling Innovation — And Intelligence
Spooked investors 1, Greenspan 0
A Time for Reckoning: Ten lessons to take away from Iraq
iPod Nation

Quote of the Day:
“It’s not that I am so smart; It’s just that I stay with problems longer”
-Albert Einstein

Category: Finance

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “Chart of the Week: Nasdaq Head & Shoulders Formation?”

  1. Yasser says:

    IMHO, that isn’t a head and shoulders. The right shoulder dips to the same level as the head, invalidating the pattern.

    Besides, given that this is the third test of roughly the same level (i.e., 1870-1900), a sustained bounce should be less likely because the pool of potential buyers was depleted in the last two tests of that zone. The more tests of a particular support level, the less likely it will hold…