When the S&P 500 Index formed higher highs, but lower lows late-last month, many were quick to point to this pattern as being a textbook bearish megaphone, a sure sign of a major market top. However, we discussed many times the notion that downside confirmation was necessary for the bear case, since the overall trend was firmly higher. Furthermore, the pattern became widely-discussed and anticipated, which is a sign that perhaps if something in the market is too obvious, then it will not materialize.
As we know, that megaphone never amounted to much, with the market instead pushing higher yet.
This time around, though, we are once again facing higher highs but lower lows on the S&P. Only no one is really talking about it.
It’s probably nothing, right? Those megaphone patterns are so antiquated, after all, right?
They don’t matter until they do.
Below 1548, and this one has my full attention…
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Interesting observation on a moderately unusual pattern, and I suspect you are on to something. There were a couple of really big megaphones that surfaced over the past 10 years (50 to 100 points); once somebody noticed it they seemed to get a lot of attention. Of course the market took it’s time and dropped when nobody was paying attention.
it was caused thanks to the divvy if u take a look on the spx it isnt the same… i dont know how tech analysis approach is about divvy… just saying
That is a chart of the SPX, you are talking about SPY.
ohh sorry