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This 5-pack of chart focuses on key U.S. stock index’s and how each of them are facing key long-term lines at the exact same time and a couple of them are facing Fibonacci extension levels too. If one breaks out will all breakout? If one breaks down will others break down too?
In time, investors “will escape” from these line…which direction is the key!
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I shared the above chart one month ago today, reflecting that the Dow was facing some long-term lines with average valuations 66% above long-term averages. Since this chart was produced Bio Tech & Social media darlings have had a rough 30 days, with many of them off 20% and more!
From a Power of the Pattern perspective, IMHO, when technical analysis and valuations line up in rare form, it increases the potential we are near important emotional price points in the market.
The markets will “Escape” from these price points and valuations, you get to pick the direction…Break Out or Break Down???
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