Caution: Similarity to August Chart

November 29, 2007 at 10:02 pm by Will

Just a note, for the seven of you who follow my trading thoughts and miscellaneous ramblings (i.e. who didn’t find me by Googling Jim Cramer and Dan Dorfman — that’s pathetic, wrote a stupid little post in Feb ‘06 and it’s still the top search engine lead into my site).

The SPYders action the last three days has eerily duplicated the pattern they formed in August just before the final “drop to the bottom”:

SPYders identical pattern in August and November

Note the similarities:

  • RSI(4) topping in the high 60s, RSI(2) in the mid-80s.
  • Three higher highs engulfing the action of the prior 7 days.
  • An indecisive spinning top candlestick on the third day (which was today).
  • Declining Volume on each of the three days.

As the legendary trader Elmer Fudd used to say, “Be Vewwy Vewwy Careful!”

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