QQQ weekly H&S

[Covertibility]

Head and shoulder formation

As to what trigger it, let the guessing begin:

1) Macro event: Europe, Japan
2) IT spending slows - watch ORCL, CRM to warn (unlikely but that would send the market reeling)
3) MSFT, INTC, AAPL, TXN warns of lower demand
4) Republicans

 

[gobar]

seen so many failed head and shoulder pattern in past 5 yrs...

here is my theory..
too many failed H&S we are in a bull market
failed IH&S we are in bear market...

 

[Covertibility]

Agree. I had a previous H&S pick on the radar, GOLD, that is a good example. The squiggly lines didn't trigger a short sale until 2 months later but by then it wasn't a H&S pattern.

 

[viktor_k67]

The market is positive and volatility is very low - it is difficult to expect any strong correction at such conditions.

 

[iceman1]

What I was taught at CME was until it breaks N/L and re-tests you really don't have confirmation. Now maybe things have changed since Edwards & McGee and Murphy wrote their books.

lol

 

[daniel33]

Quote from iceman1:

What I was taught at CME was until it breaks N/L and re-tests you really don't have confirmation. Now maybe things have changed since Edwards & McGee and Murphy wrote their books.

lol

By the time that happens, assuming it happens, you lose a big chunk of the reward.

Better to short the right shoulder, stop above head, and then examine what happens at the neck line.

Sometimes an inverse head and shoulder forms at the neck, other times the neck flips but that just too late of a call. Right shoulder is a much better entry.

I doubt AAPL returns to the 700 area anytime soon, the right shoulder theory is not crazy considering that.

 

[hard kore]

Quote from daniel33:

I doubt AAPL returns to the 700 area anytime soon....

you mean ever.