Written by Rick Ackerman, Rick’s Picks
Today’s chart shows a broadening top formation that has potentially ominous implications for the aging bull market. This particular pattern is described in the classical Edwards & Magee work on technical analysis, and its track record for predicting important tops is impressive.
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My own technical work, using Hidden Pivots, nailed the so-far all-time high at 2488.50 recorded three weeks ago within a single point, but it was inconclusive as to whether that peak would prove to be the elusive Mother of All Tops. The Edwards & Magee pattern cannot predict this with certainty either, but it can surely open our eyes, especially when seen in conjunction with my own work, to the growing possibility that the stock market has already made a very important top.
It’s always possible that last week’s bounce will continue, producing yet another record high. But if that high should be followed by a lower low, the effect would be to shift the Edwards & Magee broadening top formation onto a chart of larger degree, increasing its possible significance.
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