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Has anyone else noticed this technical formation? I’m sure many have but I haven’t heard a lot of noise about it.
It is only visible on a very long term chart and boy, it doesn’t look good at all. Double top formations are among the most reliable, which makes this ominous. The sheer size of it is also not good news for the market because a measured move would take the S&P 500 Index (SPX) to … well, let’s just say no one, not even a bear would like to think of a world with the index at that level.
The only consolation I can give myself is that it is reminiscent of the very large head and shoulder formation everyone saw towards the bottom of the last bear market. If you look at the chart you can make it out.
The left shoulder occurred in 1998, the large head from 1999 to 2001 and the right shoulder in 2002. The measured move for that technical formation was also hair raising. But it never actually happened even when it broke below the neckline. It did however, give a lot of doomsday scenario fodder for the perma-bears.
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