I am not a great technician or reader of the charts, but I just ran the Head and Shoulder chart pattern recognition process – giving us about 10 stocks with that pattern. The Inverted Head and Shoulder pattern has over 80 stocks identified! That is an 8:1 ratio. Let’s do a little bit of ad hoc analysis. The H&S chart pattern is generally thought to be a “bearish” signal for a stock in a general uptrend. An inverted H&S chart pattern is the reverse – a “bullish” signal for a stock in a downtrend. What has been the general trend recently?

“Insane volatility?”

Yes, that is the correct answer, but in general things have been down in the last two days. If you see 80 stocks with a trend reversing chart pattern pointing UP vs. 10 stocks with a bearish pattern – what thinks you? I would think it is a bullish short-term signal. Heck, I will say it means we turn around the rest of the week and end up much higher.

Then it will be time to sell into strength (??)

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