NYA’s chart looks perfectly normal and perfectly bullish — as long as you don’t look too closely.  If you do, you’ll see that the rising red wedge delivered higher, not lower, prices. (It was a good thing, though, as it prevented formation of a very bearish H&S Pattern.)

The rise into May 2015 completed an obvious Inverted Head & Shoulders Pattern that promised much higher prices — but, never played out.  Instead, a 15.5% plunge almost killed off the rally from 2009.Likewise, the breakout we correctly forecast back in October [see: Oct 25 Update on NYSE] failed to hold.  What is it with NYSE and bullish patterns, and will the latest breakout last?

continued for members…

The tops between June and August were nicely aligned (the white TL below.) So, when NYA busted through them in late October, it seemed like the purple channel top would be the next stop.  Instead, we got a series of lower highs that forced a redraw of the TL (in red.)  It’s not the end of the world, but it does make one question what would otherwise appear to be obvious paths forward.  I’ve inserted a falling red channel that fits sorta well.  If it’s drawn correctly, then NYA should face resistance at about 10,410 — top of the red channel.

After that, resistance appears to be centered around the red .618 at 10588 and .786. at 10881.  At that point, NYA would have an opportunity to really break out.

If, on the other hand, it can’t break out of the red channel, then the bottom of the rising white channel could be called upon to support it a third time in only 4 months (about 9940) with the neckline of a huge H&S Pattern (in yellow) waiting below at about 9640.

The H&S targets 7800, but the more likely target is the combination of the purple .886, white .786 and white 1.272 at 9040.  It would allow NYA to put in a higher low that’s in line with the falling red channel bottom.The H&S came within a few points of completing on Sep 29.  The rise since then was clearly designed to avoid it playing out.

Stay tuned.