I looked at the charts with a fresh set of eyes after the long weekend but didn’t like what I saw. I’m very worried that the bear case will prevail in the near term as the market digests the latest Fed rate hikes and earnings numbers.
I have always found it instructive to look at the Bear funds (funds that trade inversely to the broader market) since most of us are trained to look at charts from the long side. The UltraBear fund looks like its making a bottom (a top for the market) because I can clearly see a Crouching Tiger formation on the weekly chart.
I’m tired of the "Three Peaks and a Domed House" formation because its very difficult to trade and I was hoping that it was invalid. However, its all I see when I look at a chart of the NYSE. Here’s my ugly interpretation of the chart and the pattern…
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Finally, I already mentioned the breadth indicators have rolled over and nothing has changed in this department.
Overall, its not a pretty picture.