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.
