We’re Rapidly Approaching the Crisis to Which 2008 Was a Warm Up
by Phoenix Capital Research
Stocks broke down in a big way this week, falling below the trendline that has supported them since late August. Indeed, it looks as though we not only broke below this line but have since rallied to retest it: a classic pattern during corrections.
The question now is if this is just a minor correction or the start of something more. The S&P 500 appears to have formed a rising bearish wedge pattern (see above), which usually is a termination pattern that results in the underlying security falling to retest its base (in this case 1050 or so on the S&P 500).
However, with Government intervention in the markets being what it is, we could also simply see a minor correction here followed by yet another ramp job. Indeed, this is exactly what happened in 2009 when stocks broke a near perfect rising bearish pattern only to bounce back and begin yet another ramp job: