The German DAX is showing a Head and Shoulders top set up on the hourly chart. Given the context of a bearish megaphone set up on the daily chart, worth knowing about.
Thursday, 23 August 2012
Sorry, I plead guilty of sometimes staring too hard at hourly charts. Earlier today I jumped the gun and tweeted "Yesterday's S&P 500 bearish break from wedge now looking false. If so, new highs likely. Interesting times."
The daily chart shows that the break from the smaller steeper wedge is still active, not false. The market is today once again testing the top line of the larger wedge. This week's high just shy of 1427 is the only sensible level to measure risk against for the near term bearish case. If indeed sensible and near term bearish case are words that should appear in the same sentence.