Better watch out, better not cry, ProTrader Mike is going to tell you why…the Dow is about to take a crashing you know….
What is the Megaphone Pattern? A megaphone pattern is considered bearish, indicating that the current uptrend may reverse to form a new downtrend. A Megaphone Top is rare and must be played with patience. This develops after a strong advance and can last several weeks. The creation of the megaphone pattern reflects a period of time when bulls and bears are battling to gain control of the market. The pattern occurs after the bulls have been charging and driving the market much higher as we have seen in the last 25 consecutive trading days.
A few days ago, I called the market top at 17,735 and put a long position on UVXY at $20.92. The markets did retreat a bit today and the Dow did close red. This is a sign of the Cupid Top forming, which is a foreshadow that the Love is over. During the formation of the Megaphone Top bears are exerting increasing influence on the market, causing it to set a series of lower lows. The increasing volatility eventually creates a sense of uncertainty, leads to profit-taking, and deters some of the bulls from making any further commitments. This should result in UVXY rising, as on 10/16 just one month ago it set a high of $56.28. Last Price as close today 11/19 = $22.43
Watch Video = https://www.youtube.com/watch?v=afKh9FB_lbc
The following analogies describe the current market condition:
1. Hey the party is over guys, it’s 3:00am and the bar is closing. Time to go home, everyone’s drunk…
2. You’re about to go over the waterfall in a barrel, really…
3. The Speed Limit is 65mph; you’ve been driving 90mph for over two hours now, better slow it down, you’re pushing it now…
4. You’re walking the plank, blindfolded and there is no step in front of you, ooops….
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