May 31, 2007 Stock Market Recap
The indices were mixed today. Small caps and tech closed higher while the larger caps were basically flat. Volume increased across the board and I’m pretty sure that can be attributed to month-end markups games activity. Trading was choppy during the day and my guess is that’s partially due to some profit taking combined with some hesitation ahead of a ton of economic data (jobs report, Core PCE, ISM, etc.) due out tomorrow morning.
I mentioned Google’s (GOOG) move above $500 this morning. It made a move toward the all-time high of $513 but reversed and closed under $500, making a nice shooting-star-like candle in the process. It looks to me like it’s made an inverse head & shoulders pattern. I’d like to see it consolidate within yesterday’s range for a bit to work off the short-term overbought condition before attempting to breakout to new highs. The divergence in OBV has me a bit worried though…
Here are the charts of the Nasdaq, S&P 500 and Russell 2,000:
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Up | Up | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
This post has 5 comments
May 31st, 2007
Hi Mike
GOOG also could looks a little like a tripple top, the only reason I brought this up is that I’m see a lot of double tops on big stocks–GE, MSFT, and others (on year charts.) Are you picking anything up on this action or is it my imagination!!!
Thanks, Gun
June 1st, 2007
Hello Mike, remember that an inverse head & shoulders pattern is a reversal pattern and as such technically needs to occur at the bottom of a well-established preceding downtrend, which isn’t the case with GOOG. While its “shape” is that of an inverse head & shoulders, the pattern’s placement has it serving as a continuation pattern. We’ve monitored a lot of these “out of context” inverse head & shoulders patterns, and even though they do not meet the requirements of the pattern, they do tend to be bullish.
dks
June 3rd, 2007
Thanks Trench.
I was going to say that an inverse Head and Shoulder could only occur after downtrend and signal a potential bottom but your post is a hundred times more articulate than anything I could have written.
I’m bullish on GOOG though.
June 3rd, 2007
“after downtrend” should read “after a downtrend”, apologies.
June 4th, 2007
WOAH… if mike wants a Inverse H&S pattern to be at the top… he can!!!! :
oes a dance:: so there… err ummm… Hi 