Tom Fitzpatrick, Citi’s top technical analyst, has spotted a pattern in the stock market that he thinks is worth monitoring closely.
Here’s an excerpt from his research commentary appears on King World News:
The price action here is still similar to that seen at the highs in 2007 going into 2008 (see parallel lines). The initial leg down from the Oct 2007 high (1,576) was 10.7%. We then bounced 8.3% before turning lower again and trending down to the 200 week moving average.
This year, the initial leg down from April’s high was 10.9%. Four week’s ago we set an interim low and bounced 7.6%, so not quite as much but still similar. While the there is still room for a small squeeze up, we ultimately expect a move down to the 200 week moving average (1,136).
Photo: King World News
Fitzpatrick also examines a bearish pattern in the Euro in his note.
Read more at KingWorldNews.com.