Warning: The Stock Market Panic Button Is About to Be Pushed
By Anthony M. Cherniawski and Janice Dorn
Nov 09, 2012
In October, we published two articles suggesting that there might be a stock market panic in October (see here and here). We were early. Whether the delay in the potential market panic was due to organic reasons, such as the excitement leading up to the November election, or some other factor is beyond the scope of this article. What we do know is that the day after the election the stock market had its worst day since November, 2011.
On that day, the S&P 500 (INDEXSP:.INX) decisively broke the Rising Wedge formation with a potential for a complete retracement to 1074.00 and the potential neckline (dotted line) for a Head & Shoulders Pattern with a minimum downside target of 1322.00. Either event could be construed as bearish — but the combination of the two may be a disaster for the longs.