12/12/13

Major US indices are now nearly all exhibiting completed or almost completed H&S reversal patterns with all the drops we saw today. I've been focusing a bit on the Dow Jones Transportation since it seems to be leading the charge.

It appears to have completed a bear flag on the hourly and four hour charts. Fib. ret. levels are proving important within this index's charts. The upward trend line from the October lows is hinting at least a 50% retracement when considering where it's support will lie next week.

The oscillators on the DJT hourly chart are exhibiting a rollover lower than their recent highs. This, to me, is a clue to a little more downside momentum for this retracement. After all, if we are seeing H&S reversals, why would we stop just below the neckline?

This particular index shouldn't stray too high above 7050 in order for this to remain intact. The next fib. ret. line is a little below 6980.

Dow Jones Transportation Daily Chart

Dow Jones Transportation 4 Hour Chart

Dow Jones Transportation Hourly Chart 

Other indices are showing similar symptoms, they just appear to be a step behind.

Dow Jones Industrial Average Daily

S&P 500 Daily