Dow Jones – End of QE 2 , Debt Limit. 2013 – Govt shutdown and Debt Limit

Its been quite some time since i have looked into Dow Jones and before writing this post did look into some blogs and mails to get a sentiment av

Now what is interesting is the above chart looks pretty similar to 2011.

In 2011

- > End of QE 2
-> Uncerainty around Debt Limit Negotiations
-> S&P downgrade.

Now in 2013

-> Fed Tapering
-> Govt Shutdown
-> Debt Limit

Now the technical similarity

-> A good strong upmove from lows after consolidation
- > Took 3-6 months to form the Head and Shoulders formation.
-> Almost a similar size of head and shoulders. ( little lesser target in 2013)

Although this is a presumption that a similar pattern will unfold but a break below 14750-14850 will confirm the possibility of a downside.

This for now is an interesting similarity but will keep watch on a similar breakdown if happens will need to act accordingly as a such correction in US markets will keep other markets also under pressure or maybe lead to a global correction.

This is another chart from Chris Kimble. Link to the post and the chart below.


Bottomline : Although there is no confirmation of a breakdown but one needs to be alert for acting on shorts as and when the price ticks below important support levels. Better to be cautious than brave at this time.