Echos of the Past
A slew of readers have been asking whether I think the S&P 500 has a triple-top formation in this 1500 area. Well, in Technical Analysis of Stock Trends -- what I refer to as the Bible of technical analysis -- Robert Edwards and John Magee note how rare triple tops are. More important, they also note that confirmation of the pattern necessitates a break in the valley below.
Yes, folks, that valley is all the way back at 660. Come on now -- breaking 660 would essentially mean going to zero, and even the most bearish of bears doesn't really think that will happen, do they? So here's a memo to anyone calling this a triple top: If it really is one by Edwards and Magee's definition, we have a lot more to fret over than just this issue alone. Another possibility, of course, is that it's merely a resistance area....374 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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