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The classic measured target formula for a head and shoulders pattern is to subtract the peak from the neckline, add that value to the neckline, and voila, you have your target. In the case of the Russell (as viewed here through the IWM), the target was $44, and that has been reached (I've drawn tinted areas for easy viewing).
As I've pointed out before, the most incredible thing is that only five weeks ago the IWM was at its highest value ever in human history.
It's going to take the strength of Hercules to push this market up. I've sold 20 ES at the pink resistance zone. This market is very, very sick.
To quote inexplicably popular stock maven Jim Cramer, Don't Be Silly. Allow me to explain…….
This morning I saw the market move sharply higher. I still had 27 short positions. I started closing them out willy-nilly, not even looking at the charts. My rational for this, if you can call it that, was:
Well, that was just dumb. As we know from the Three Rules, one should never do an ad hoc close. And I was ad-hoc'ing all over the place. Stupid.
So. Be like Jim. Don't be silly.
The market is having one beast of a time trying to make its way past the enormous overhead resistance. Try as it might, it doesn't have the strength. It's actually kind of sad………
My only really big bull position now is DIG, and I'm a relatively weak hand with that one.
It has been one month since equities have gone up for more than a single day. It has been two months since equities have gone up for more than two days. Pathetic, isn't it? In the spring of 2007, the market went up virtually every single day for three months. So let's just say we've had a lot of trouble putting together a convincing rally recently.
The fact the market will almost certainly open higher this morning, in this context, means almost nothing. But at least for the moment all the pre-market quotes on my positions are encouraging.
