There are times when head and shoulders patterns fail. Even though in our case the S&P 500 experienced all the signs of a classic head and shoulders pattern, it failed. Technical analysis gives signals but it is not 100% correct and many times chart and signals fail. Failures of H and S patterns results in strong rallies. This means I have covered all of my shorts including GS and looking for opportunities to put our cash to work. Today’s rally is from many technical traders covering as volume is below average. Until the market gives us clearer signals I will not be short and will start looking for good trading opportunities.
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