Dual Head-and-Shoulders patterns warn of a potentially big downside move and new highs may be a trap for bulls
by Chris Vermeulen
Sprott Money
My research team is issuing a Special Alert Warning after the NASDAQ and SPY reached new all-time highs. Our research team identified a massive Head-and-Shoulders pattern (highlighted in BLUE) that originated in 2014, set up a “head” in 2018, and is now forming a “right shoulder” spanning 2019 and 2020. Additionally, a minor Head-and-Shoulders pattern is setting up on the right side of the chart below (highlighted in MAGENTA) that peaks in early February 2020 – just before the COVID-19 price collapse. Will this dual Head-and-Shoulders pattern prompt a massive downside price move over the next few weeks and months, or will the US stock market continue to rally higher – breaking the resistance level the shorter-term “head” (near $174) and keep going?