Friday, March 8, 2013

Short term market views

Below I posted some longer term views on the market, here are some shorter term views:

The first chart show our 30 min S&P 500 chart which we showed last week as an inverse H&S pattern - clearly this is playing out perfectly and appears to be subdividing into a wave 5 structure, once wave 5 is complete, then I would expect some kind of pullback/correction in the market.

the second chart shows a daily view of the S&P 500 - this chart shows a fractal and how the SPX may be in the process of forming a Head of a H&S pattern which is VERY SIMILAR to last year!  I would then expect a similar pullback once it is complete

The 3rd chart shows another view of the H&S pattern that is in the early stages of formation, the left shoulder is in place and the head is now forming. Once the head is complete, I'd expect a pullback (which will get the bears exited) however then I would expect one more rally and push higher, however it should form a lower high, which will form the Right Shoulder of the H&S pattern - then finally the market will be set up for a larger pullback.  It will the Right Shoulder where traders should look to aggressive short the market.

take care and have a great weekend folks!!

Matthew Frailey

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