Sunday, March 9, 2008
Possible Stock Market Breakdown Scenario on S&P 500
In the chart of the S&P 500, we notice that the patterns from November 2007 to December 2007 compared with the pattern from January 2008 to March 2008 are very similar. If the pattern holds, we can expect a further breakdown below 1270 on the S&P 500.
While not a guarantee, the S&P 500 could be forming a bearish formation, the inverted cup and handle pattern. The Drop to 1270 on January 2008 is the first part of the cup. The recent decline to 1282 could be part of the other side of the cup. If the pattern forms, we may see some sort of a handle, then eventually, a breakdown below 1270.
Again, this is only a potential scenario and not a guarantee that we will get a breakdown on the S&P 500.
Today's Chart with Info Above