CS pointed out this "floating island" pattern in the SPY chart. My response was that it was evidence of the incredible levitating market. Island patterns can potentially be bottoms or tops, but for now its just a potential. In such a pattern investors who entered long/short in the island get trapped when the stock gaps down/up to leave the island reversal pattern. Those trapped investors fuel the move as they exit losing trades. For now its just potential, there really is no sign of a top yet. That perfect looking wedge that I mentioned last week is starting to look more like a new up channel (see green lines below). We should know early next week where this market is headed. If its an up channel we should break $87.65 on the SPY, if its a broken wedge we should drop big Monday or Tuesday. For the island reversal to complete we'd need a big gap down below $82.75, which is, unlikely. The up channel would be violated at around $84.
Anyone else into Weezer? I just ran across some other great videos of theirs on youtube, think I'll post some this week. With charts of course!!
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