Hi Al,
On the $SPX chart are you saying that 1180 must be taken out and then hold on the retest to be a double bottom?
Absolutely, 1180 is key. That is what "confirms" the double bottom. Otherwise you may get what happened at the end of Feb beginning of March which was a potential double bottom which never confirmed.
stockcharts.com[w,a]daclyimy[dc][pb10!b20!b50!b200][vc60][iUc20!La12,26,9!Lf!Lh14,3]
And once it breaks above 1180, it will likely come back to test that level to ensure it wasn't a false breakout.
I like to look at the significant 1998 bottom to illustrate what a "true" bottom looks like.
stockcharts.com[w,a]daclyimy[d19980701,19981118][pb10!b20!b50!b200][vc60][iUc20!La12,26,9!Lf!Lh14,3]
You can see the double bottom at around 950 and it was confirmed when 1070 was broken. It was then successfully retested on Oct 27 or so. This bottom kicked off the greatest bull run in history.
I personally think there is a good chance we do confirm the double bottom but I have a sneaking suspicion that the retest will fail. I think the shorts could push this puppy up that much easy, but this down cycle in which we are in is still incomplete, although it is nearly done.
Hope that helps.
Cheers
Shack |
