Big E.....The Dow 50 x 150 chart ran right into the Bullish Resistance Line (brl) at 8,000 and made it one box higher to 8,050 before turning around. The BRL is firmly in charge of this chart and it's at 8,300. A move to 7,750 in this down column would put the chart in another HPT pattern and that would indicate to me that the Dow is going to visit the 7,500 area once again. The next sell on the chart is at 7,450. The Dow has visited 7,500 - 7,550 4 previous times since August and the Bearish Support line at 7,300 might have to be relied on to hold should the chart move into a High Pole Top pattern.
I'm no expert in the Head and Shoulders pattern, however, this Dow chart looks like a classic example of the pattern. It looks as if the right shoulder is being traced out right now. Eric, are you familiar with the pattern and it's implications? Am I correct in saying that that a gig downmove can be expected upon the patterns completion. What's the theory behind the H&S pattern?
Your pal,
Bruce |
