I like the RSI as an indicator. I was looking at the chart of the SPY and as I have often observed, major drops often occur with a bearish divergence in the RSI and the RSI weekly failing to reach 70 before turning down. Notice this pattern in 2000 and 2007 in the SPY. We have that same situation now. Of course prices could keep going up and overcome this. But not a bad set up for a fall. I then I looked at the price action from about 2007 to 2012 as a large inverse H&S and it gives a projected target (the way I view it ) to where price is now. Many have observed we have a rising wedge which is supposed to be bearish and prices are at the top of the wedge. I noticed the spacing between the previous large drops was similar. Using the time function with the arrows I was amazed to see we are almost at the same number of days now as between the two previous drops. I did not check this to the day but just drew the arrows. Personally I am not sure of the significance of this but found it interesting. Finally and least important I drew the pitchfork. I put the left tail end on the first day of data I have and to my surprise it looks there would be resistance right where we are. Again I don't know the significance of this but it sure looks nice.
I would not trade on this chart but I find it very interesting and hope you will too. I personally will not be surprised to see the start of a major down turn in the next week to month or so. Will wait for a sign be before jumping in. Take care.
I would not trade on this chart but I find it very interesting and hope you will too. I personally will not be surprised to see the start of a major down turn in the next week to month or so. Will wait for a sign be before jumping in. Take care.
