It’s probably too early to break out this chart, but I thought I’d show it anyway. Usually when the market falls steeply over a few days then consolidates for several days it is only the half way point of the move. Today it looks like we fell out of the consolidation range. As a result, my back of the napkin math targets roughly 1860 on the S&P 500 Index (SPX) as the next stop for this move.
You’ll note that during 2013 the pattern failed a couple of times. The failures are similar to many other indicators in 2013. Nothing that predicted lower prices worked. If the market is starting to turn over then I expect to see indicators like this pattern start working again.
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