Another Backtest

Head & Shoulders Patterns are wonderful chart patterns, providing solid advance warning of impending plunges in stocks.  But, their clearly defined trigger points and targets can also be used by those propping up “markets” to negate the move that would otherwise play out.

Such is the case in SPX, where two different H&S Patterns have completed, and partially played out, only to see sharp spikes in CL and plunges in VIX drive prices back above both necklines.  It has become a hallmark of the “markets” for the past eight years, and makes sticking to your guns that much harder.  And that, of course, is the whole point.2017-01-13 VIX 60 0615

Yesterday, SPX got within 2.11 of our next downside target before VIX was hammered by 10.2% — a spectacular move that resulted in SPX melting up 17 points into the close.  Another day, another pattern busted (for now) by the algos.

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