I’ll admit, after watching more than a few patterns fail over the past day or two, I was feeling a little snakebit.
On Tuesday, we completed a nice little bearish butterfly pattern at the 1.272 extension.
But, the next morning, we were up 20-points in spite of horrid economic news — nailing, instead, the 1.618 extension. Thankfully, a quick reversal followed, confirming the butterfly. Miller time, right?
Of course, the reversal was a headfake. I watched dejectedly as SPX soared and my ego slumped. Fifteen points later, I was on my third Excedrin of the day, wondering where my wife hid the Oreos.
My only hope was a little H&S; pattern that looked suspiciously like the one a few days before, and a shabby little rising wedge.
I snapped a picture, but didn’t have the heart to show it to you, my faithful partners on this bear hunt. My fears were realized when the market rode BofA to the moon this morning. I was clearly no match for Warren.
My only hope was to criticize the deal, get a few million people to read the critique, sell their BofA (and everything else, while they were at it) and bring stocks back to the neckline of my pathetic little H&S; pattern. Not too much to ask, right?
The completion of the pattern should send SPX down to 1120. But, the really cool part is that it completes a bigger, not-so-pathetic H&S; pattern that could send SPX to 1040.
Recall that 1040 is one of those key targets we’ve been talking about, as it corresponds with the last major low of last summer’s swoon. That particular low is, itself, the origin of gobs and gobs of important fan lines, so I think it’s pretty über-important, itself.
Will it all unfold as planned? We’ll see what GDP and BB have to say about it tomorrow. Irene might even slip in a word or two.
As for me, I’ll be glued to my monitor — Excedrin and Oreos nearby. Okay, maybe some champagne on ice…just in case.