The Head and Shoulders experts are popping up everywhere these days. Never has there been a price pattern searched for or imagined in people’s minds more than the infamous Head & Shoulders Pattern. Funny, as much as they love to talk about it and as much airtime as it gets on the TV and Internets, it’s actually one of the more rare patterns driven by supply and demand. The reason it is so rare is because, by definition, it is a reversal pattern. Since markets trend, and ongoing trends tend to continue trending in their direction, by looking for a Head and Shoulders Pattern, you are doing the exact opposite of what we’re trying to do here in the first place: recognize trends.
As a simple definition, a Head and Shoulders pattern, in this case, a Head and Shoulders Top, is made up of two higher highs (the “Left Shoulder” and the “Head”), followed by a lower high (“Right Shoulder”). After each of the prior higher highs, the ensuing sell-offs should find support near a similar point. This is what is called the “Neckline”. ...
/www.benzinga.com/etfs/broad-u-s-equity-etfs/16/01/6152182/about-that-head-and-shoulders-top-in-the-s-p-500 alt=About That Head And Shoulders Top In The S&P 500...>Full story available on Benzinga.com
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