Head and shoulders…. knees and toes?

Preparing for my talks out West this weekend, a couple of chart updates really stand out.  This one suggesting a big head and shoulders pattern on the broad Canadian stock market.
Source:  Cory Venable, CMT, Venable Park Investment Counsel Inc.

And this one on the Canadian Venture Exchange (resource companies) which tends to lead the risk trade to the downside.  Past suggesting…this index has already completed a foreboding right shoulder and is now trading back at the level where the latest commodities boom (bubble?) began with the credit bubble in 2000.  Interesting that the waistline on both of these charts is somewhere around the 2009 bottom.  Secular bears tend to revisit the prior cycle low with each recession.  Will this one break precedent?
Source:  Cory Venable, CMT, Venable Park Investment Counsel Inc.

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3 Responses to Head and shoulders…. knees and toes?

  1. Mommybomm says:

    EWC now death-crossing and Relative Strength a paltry 28. Not good, not good at all.

    Dare I say the United States of America is now thinking of ‘regime change’ come November? The President only tanked the dying markets more, each word he spoke on television today. One termer. The riddance of ObamaCare by the Supremes and a Republican victory would be the two necessary ingredients for ‘hope and change’.

  2. Chris says:

    Yes, a nicely formed head-and-shoulders. Not only that, but you can argue the “right shoulder” on the first graph is composed of two smaller heads-and-shoulders (sort of a fractal, though this is more apparent IMO on a chart of the S&P 500).

    Oh, and there’s a nice double-top on the TSX with peaks in May 2008 and Feb 2011. Combine that with the “left shoulder” in 2001 and we could look for a “right shoulder” in roughly 2018. Hmm…

    OTOH, you could argue that the S&P 500 forms a head-and-shoulders pattern over the same time, which means a completion of that large pattern could portend a big, big plunge.

    Technical patterns are only probabilistic guides to what might happen. But it all looks quite bearish, no?

  3. adam says:

    Well the left shoulder was 1 year long and year we are almost exactly the same time period along in the right shoulder. Will the market crash as predicted in the next couple months??

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