Surprise in store?

Good day all,

The last trading week gave us quite a few good pieces of news. Strictly, I am still a brear on equities; but, I see the current market as a ranging one after I got stopped out on a few shorts. I tell myself that as a chartist, I should not be swayed too easily by news. It is alright to read up and be in the know but be cautious not to let news articles cloud one’s judegment. With that, I am still a bear – there is no clear indication on the chart yet that tells me to buy dips instead of  selling rallies. I support my bearish view in the charts below.

 

Basically, I see downward parallel channels depicting the general downtrend indices have been in for quite some time now. European indices are mostly below the 200-day MA. Technically, I do not see any reason to be bullish on indices though it may seem the recent consolidation is hinting at a rebound. So, what surprise exactly am I thinking may happen?

Several indices are forming unconfirmed inverted head and shoulders patterns. Take a look at the video below. The presenter, Oscar Carboni, shows us the formation of an inverted head and shoulders pattern in quite a few indices.

Link: http://www.youtube.com/watch?v=-itHSTMMkkE&list=UUez8uA1o_fDYsrSf4auWSjg&index=1&feature=plcp

In conclusion, if these inverted head and shoulders do confirm with an upward breakout, it signals the start of a climb upwards. A downward breakout means the general downtrend shall continue – as I have been pitching for a few weeks already. Let’s see how this goes.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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