Broadening tops – also known as Megaphone tops due to their shape – are very bearish chart patterns.
DOW weekly chart shows the much larger broadening top formation referenced earlier. Target remains in the 8,300-8,150 area (green lines)
The overextended rally from March 2009 had become increasingly unstable and the explosive move a few weeks back was the result. Unfortunately this instability and overextension also applies to larger time frames – hence my bearish views for some time now.
Long term charts of key equity indexes continue to give bearish warnings and the March 2009 lows will be breached according to my analysis.
As stated before, support around 10,000 will be breached and the target for this down leg: 8,300-8,150 unfortunately won’t hold either.
COPPER/CRUDE OIL/AUDUSD daily charts remain bearish and weekly charts remain bearish to neutral.
USD bullish warnings since 2009 on weekly and monthly charts have not changed so further USD strength and thus EURUSD, AUDUSD, COPPER weakness is expected.
It could be a multi year USD rally as its monthly indicators remain bullish and the opposite for EURUSD monthly of course.
In other words, the EURUSD long term chart remains extremely bearish.