Head & Shoulders Top? by David Stanowski
13 August 2011
A massive Head
& Shoulders Top seems to have formed during the 2000-2011
topping process in the Dow Jones Industrial Average. (see graph below)
The right shoulder has just broken its uptrend line (up sloping solid
red line), beginning the move to the neckline (dashed red line) that
currently cuts through the 6,300 level on the DJIA.
Obviously, if the Head and Shoulders pattern proves to be valid, the
second leg in the massive bear market that we have been expecting has
begun, which would require a
move some place below the March 2009 low
All valid Head and Shoulders patterns start with a move to
the neckline, which currently runs through the 6,300 level.
they eventually break the neckline as explained in the article accessed
using the link below. The expected move below the neckline is
calculated by subtracting the level of the neckline from the head, and
then subtracting that same distance below the neckline.
Head = 14,279.96 (October 2007)
Neckline = 6,300
Difference: 14,279.96 - 6,300 = 7,979.96
Since the normal price target, calculated by subtracting the
difference from the level of the neckline is impossible; the bearish
implications are chilling!
Only time will tell if
this really is a massive Head and Shoulders top. Click on the following
link and see what you think.
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