Updated: Nov 16, 2016
In May of 2015, SPX completed a huge Butterfly Pattern set up by the 57% drop between 2007 and 2009. It helped us call an important top [see: The Last Big Butterfly] and made for some pretty profitable shorting opportunities.
Since then, as TPTB wrestled with a way to get SPX back above 2138, the Dow slowly worked its way higher. Just Monday, it came within 40 points of completing its own Butterfly Pattern for the same time period.
continued for members…
Might this signal another important top?The daily picture shows a deep dedication to breaking above the 2015 highs and backtesting the falling channels established by the subsequent drop — whichever channel you happen to like.Forty points is nothing to the DJIA – a measly 0.2%. So, it would take very little effort to push it on through. However, as we’ve been discussing for the past several days, SPX is currently in need of a 1.5% retracement to backtest its broken white channel and, most likely, its SMA10.
* * *
note to members: the above was originally added onto the DJIA page under the “markets” tab. I thought it might be easier to follow the progression if it had its own post.