Monday, May 31, 2010

A Very Bearish Technical Outlook for the Market

The mysterious stockmarket618 provides the analysis:.

DOW daily chart shows another broadening top forming from last weeks action. Not confirmed yet though.
Broadening tops – also known as Megaphone tops due to their shape – are very bearish chart patterns.
DOW weekly chart shows the much larger broadening top formation referenced earlier. Target remains in the 8,300-8,150 area (green lines). 
The overextended rally from March 2009 had become increasingly unstable and the explosive move a few weeks back was the result. Unfortunately this instability and overextension also applies to larger time frames – hence my bearish views for some time now.

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