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Russell 2000 at Critical Juncture PDF Print E-mail
Written by Chuck Ludwigsen   
Monday, 08 March 2010 17:06

Russell 2K Russell 2K

Steve asked me to post this chart.  Please click on the image to the right to see the chart full size. ~ Chuck

 

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LanceM |24.193.177.xxx |2010-03-08 17:24:07
Nice! the Russell in overbought mode at that Trendline Resistance shown on the chart - It reversed at that line twice before - $$$$$ . Thank you SteveM and Chuck
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SteveP |70.10.25.xxx |2010-03-08 18:14:06
sorry if a dumb question, but is that topping into to a megaphone pattern?
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LanceM |24.193.177.xxx |2010-03-08 19:12:37
Steve P: The way I understand a Megaphone Pattern is Higher Highs and Lower Lows - which sets up a break to the downside.

We don't have lower lows on this chart


But here is the formal definition - SteveM may want to add to this - I answered because I just happen to be studying the chart

Reverse Symmetrical Triangle (Megaphone Chart Pattern)

Implication

A Megaphone Top also known as a Broadening Top is considered a bearish signal, indicating that the current uptrend may reverse to form a new downtrend.

Description


A Megaphone Top is a relatively rare formation and is also known as a Broadening Top. Its shape is opposite to that of a Symmetrical Triangle. The pattern develops after a strong advance in a stock price and can last several weeks or even a few months.


A Megaphone Top is formed because the stock makes a series of higher highs and lower lows. The Megaphone Top usually consists of three ascending peaks and two descending troughs. The signal that the pattern is complete occurs when prices fall below the lower low.

Reverse Symmetrical Triangle
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SteveM |Administrator |2010-03-08 19:27:27
We don't have a megaphone pattern here. What I wanted to show was that we kissed the top ascending trendline today at the same time we were hitting the top bollinger band AND we are at EXTREME overbought levels. Like I mentioned on the blog, all the ingredients for a short term top.
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SteveP |70.10.25.xxx |2010-03-08 19:40:30
Thanks to both of you!!
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Ron Rebner |98.27.187.xxx |2010-03-08 19:50:25
Steve. A question I think many of us are thinking about. If the S&P does move into new highs, closing firmly above January's high of 1151, what does your technical analysis indicate might be the next level for the S&P to be tested?Thanks.
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SteveM |Administrator |2010-03-08 21:58:57
I t depends on what the other indices are doing at that time. If the S&P does get to the target of 1155 (give or take) for the inverted H&S but the Dow fails to hit a new high then we could have a great negative divergent sell signal similar to other major highs. If all indices hit a new high then we could make a push toward 1200.
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