Potential Diamond pattern-Head of a possible Head and Shoulders
My current opinion (to be invalidated if there are signals that contradict my current view). On daily charts, we could probably see an ultimate outburst to the top next week before a progressive collapse (on November 2019?) of the US (and therefore worldwide) equity markets. If this happens, then we would have a perfect Diamond pattern which would be potentially the Head of a Head and Shoulders' pattern. I'd pay attention to the monthly diagonal supports, in addition to everything you know (whether it is linked to data analysis, indicators, patterns, momentum, volatility, intermarket analysis etc.).
If this, which could appear to be too good to be true for long-term short-sellers, really happens, then maybe we could see the "Trump rally" become erased(Fundamental new could be linked to raise in corporate taxes again? Punishing the FANG etc?). Borrowing could become more expensive (increasing interest rates). This would go the same for the European Quantitative Easing. We would then be back to 2014-2015, where I think every equity markets started to become a Central Bank-engineered "price bubble".
Volume could decrease towards the formation of the potential second shoulder, then spike while the neckline is being cut. The RSI could start going lower and lower until oversold territory. But this would be a positive sign for shorts.
If this, which could appear to be too good to be true for long-term short-sellers, really happens, then maybe we could see the "Trump rally" become erased(Fundamental new could be linked to raise in corporate taxes again? Punishing the FANG etc?). Borrowing could become more expensive (increasing interest rates). This would go the same for the European Quantitative Easing. We would then be back to 2014-2015, where I think every equity markets started to become a Central Bank-engineered "price bubble".
Volume could decrease towards the formation of the potential second shoulder, then spike while the neckline is being cut. The RSI could start going lower and lower until oversold territory. But this would be a positive sign for shorts.