Complex Head and Shoulder Pattern

Complex Head and Shoulder patterns are rare but when they happen it takes every one buy surprise.

The reason is the bulls interpret the failure of the first right shoulder as a reason to get very bullish as the price starts to rise to the 2nd shoulder peak.

The bears who are very heavily short get squeezed out and start throwing their positions over board. The squeeze causes the price to spike higher and the bulls buy more .

Bang! Peak 2 rolls over and everyone gets beat up.

According to Bulkowski's book, on a scale of 1 to21 ( 1 being the best) this Pattern is a 3 and has a high potential of reaching the target zone.. once the neck line is broken.

This chart is a percent comparison of the three major markets Dow /Naz / S&P .
All three put in 2 left shoulders and a head. We are now waiting for their right 1st and 2nd to finish. As you can see, the 1st right shoulder is about to be or has completed in all three markets now we wait for the 2nd one to form.

Good chart patterns will always be well defined and have balanced appearance when completed . They are like anything beautiful. They look right and you just know it when you see it.

Based on this analysis, I expect to be long Spy Monday Am up to the top of range of the left shoulders. Then I will become a bear again Wed or Thurs.