We get to talk to a lot of traders and investors every single day. I like to listen.
In the first chart, we have what seems to be the consensus view. Investors fear that we’re going to complete this top in the S&P500 sending prices down even lower.
Do you agree? We break 4100 and down we go?
Or could it be like the second chart, and all this support holds?
We’ve seen this story before.
The current environment reminds me a lot of 2010.
We had that ripper in stocks off the March 2009 lows, and then in 2010, consolidated in what appeared to many as a classic Head & Shoulders top.
But then it wasn’t, and stocks never looked back:
We have a similar set up today: an epic rally off the March 2020 lows, and then a toppy looking consolidation.
The best Head & Shoulders tops are the ones that aren’t that at all, and then stocks rip higher.
Is this one of those?
Let me know what you think.
Which way will they fall?