Toppy signals in the short term
Hourly showing a bearish gartley over the last couple of weeks.
I see Goldman Sachs also bearish short term, so I'm in good squidlike company.
Attachment 8756
Discl. No specific position.
Lies. lies. more lies, and statistics
Quote:
Originally Posted by
peat
mind the gap.
Gaps are fascinating..eh, Peat...a science on it's own..
A important question is what type of gap is this one?.. as there are many types..Chances of gap-filling are a lot higher with certain types of gaps than others..
It seems this gap is of the breakaway type which suggests a lower chance of being filled.
The breakaways are usually the result from a break out of a chart pattern....This breakaway gap was from a descending triangle pattern breakout..
Descending triangles are generally viewed by many investors as bearish patterns, however it depends on the trend into the start of the pattern...If the trend is upward into the start of the descending triangle then the pattern is viewed more as a continuation pattern with a 73% chance of a breakout to the upside (continuing trend)..When this upside break happens it is powerful action and statistically very reliable (83% chance of reaching its target price) ..see Bulkowski's pattern site.
The generalised target price measure of this breakout is 2355 + (2400-2330) = 2425....Bulkowski's TP value is less 2355 + [ (2400 - 2330) x 84%] = 2414 ..In other words using Bulkowski's TP measure the S&P500 index has an 84% chance of reaching 2414 which just happens to be above the primary resistance break out (2400) to form a new record high..
Anything in the way can affect the TP's chances..the resistances at 2390 and 2400 should be watched...
Gap filling....Can be an anxious time....An upward breakout can be followed by a throwback to test the breakout area before it moves up again..If this happens (37% chance..Bulkowski) it will fill the gap but remain medium term bullish...
Is it a false breakout (bull trap)?...Chances of a breakeven or negative result is 7% (Bulkowski)