From the desk of Steve Strazza @Sstrazza
Thanks to everyone who participated in last week’s mystery chart.
We questioned whether it was a rounding top reversal pattern – in which case we’d be looking for a breakdown.
Or, if it was actually a failed breakdown – and we all know what tends to follow those patterns…
The responses we received were mixed. But there were plenty of bulls who wanted to be long against the former lows and bet on a swift reaction higher.
That’s pretty much the camp we were in too. We recently wrote about all of the whipsaw action we’ve been witnessing.
We said the next critical piece of information we’d be looking for was whether or not these patterns would see some real follow-through and confirmation.
Fast forward a week or so, and we definitely have our answer.
So let’s talk about it, and more importantly, what it means for risk assets.