But sometimes, it pays to worry a little. And right now, the charts aren't inspiring much confidence in me.
In the past, I've described a pattern I identified called the "double top symmetry" pattern. It's a pattern that comes after a strong rise in the market and usually indicates a continued downside move.
The parameters of the pattern are:
A strong advance taking prices well above the 200 day moving average
A break of the uptrend line of the price advance
An A-B-C-type correction to a spike low or a double bottom
A weak price advance from the low that doesn't take RSI back to previous highs
Another double top
A break of the rising wedge pattern that forms from the double top
For examples of the pattern, please look at my previous post.
Right now, several major indexes are forming the "double top symmetry" pattern.
While the sentiment seems too negative to create a waterfall decline, the price action and the fundamentals leave a lot to be desired right now. While I'm not calling for the "NEXT GREAT CRASH", I am remaining cautious and hedged.