DOW APPEARS TO HAVE COMPLETED A HEAD & SHOULDERS PATTERN
Stocks are diving Mid-day, Tuesday, May 7th. Unlike Monday's decline that was relentlessly reversed throughout the day, the opposite is occurring today. Fear has struck the market as the reality sets in that global and U.S. economies will get hit hard if the two largest economies in the world continue a trade war.
What is not surprising to us is we have see huge and growing Bearish divergences between stocks and their 10 day average advance/decline line indicators, warning a top and significant decline was approaching. We see lower lows Tuesday for the decline from last week's tops. We have been seeing lower highs. This is the definition of a declining trend.
This month's LONGWave video which will be issued to subscribers tomorrow lays out the large number of Ending Diagonals that we are seeing across the various Market Indexes.
The DJIA (below) appears to have completed a Head & Shoulders pattern. it is interesting that it bounced off our initial Right Shoulder construction line before settling on ~ the 50 DMA for support.
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