Update on NDX: May 19, 2014

Warning to small-cap bears… NDX is a handful of points from completing an Inverted Head & Shoulder pattern targeting 3822 on the daily chart.  The only catch…it’s tagged the same neckline three times before — all with no follow-through.  So, watch out for another possible head-fake.

2014-05-19-NDX daily 0830

Note that if it plays out (if USDJPY gets a big bounce here at its SMA200) then the white 1.272 should also get a tag — leaving the larger scale .786 (of the crash from 4816 in the year 2000 to 795in 2002) up at 3955 as the next major target in, say, August.

2014-05-19-NDX daily 0920

 

IH&S and H&S patterns have very consistently failed for many months now — yet another signal that the “market” hasn’t been playing by the normal rules.  Normally very reliable patterns (bearish ones, in particular) have been very unreliable.  TPTB are doing everything in their power to convince traders to stop shorting the market, and simply start buying the dips along with everyone else.

I suspect that only when this capitulation finally occurs, it’ll be time for a serious downdraft.

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