This is a follow up on a prior post and is worth a review here: http://scottpluschau.blogspot.com/2012/05/pluschau-omen.html
In that post I discussed the pernicious patterns across a wide spectrum of global ETF's in the weekly timeframe. I do not care what the world's leading economist thinks about "PE Ratios", "Earnings", or "Dividend Yields", if the necklines start to get taken out on these Bearish "Head and Shoulders" patterns with an "Igniter Move" (long candles with big volume) on these major ETF's, there is likely to be serious ramifications in my opinion.
Preparing to react keeps emotion out of decision making.
What is the game plan in these scenarios? Do you use options in order to "Hedge" against loss? What about using options in order to "Speculate" for gains?
Perhaps there will be a false breakdown and there will be a great bargain for the long term? Perhaps there will be no break in the neckline at all?
I would keep these developments on the radar screen. I use alerts to signal when the price is within striking distance of the neckline, so I don't have to keep my eyes on these charts each day.
(Click on charts to expand)
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