Fast Top vs Slow Top

QQQ is at the Moment of Truth for its Green H&S Scenario

QQQ is at the Moment of Truth for its Green H&S Scenario

QQQ is at the moment of truth for its potential head and shoulders top with triangle right shoulder. It appears to be reversing as I type this.

It could also put in a double-headed H&S or turn the entire move off the June 9th high into a larger triangle within a larger H&S top.

Sornette has announced a bubble crash set-up in FANG stocks. That means a roughly 60% chance of a 20%+ crash in those stocks that reaches its target within two weeks. The green scenario is a perfect set-up for that.

The other 40% of the time a market moves sideways for longer before a correction (purple scenario) or breaks out upwards from a smaller consolidation within an extended top like a rising wedge or rising megaphone before a larger correction.

Gold Ready for Breakout

Gold has Put In a Potential Inverse H&S Bottom within its Pink Falling Megaphone and is Ready to Break Out into H&S Right Shoulder

Gold has Put In a Potential Inverse H&S Bottom within its Pink Falling Megaphone and is Ready to Break Out into H&S Right Shoulder

Gold has drawn a potential double-headed head and shoulders on its daily chart at a critical level. Now it’s ready to break out of the pink falling megaphone to put in the right shoulder.

A Downwards Breakout from the Double-Headed H&S would Target Either the Silver Triangle Bottom or Navy Blue Megaphone Bottom

A Downwards Breakout from the Double-Headed H&S would Target Either the Silver Triangle Bottom or Navy Blue Megaphone Bottom

A downwards breakout from the H&S targets either the silver triangle bottom or navy blue megaphone bottom.

The H&S could also fail to break out, or put in a small fake breakout, to keep gold megaphoning across roughly 1250 until it completes the silver triangle.

Sornette Supercomputer Calls for a Crash

The supercomputer that monitors the stock market for Didier Sornette has diagnosed a bubble in four sectors of the market and has recommended shorting the FANG stocks.

Sornette’s bubble calls result in a crash of at least 20% roughly 60% of the time.  In those cases, the crash reaches its target within two weeks of the bubble call.

The other 40% of the time, the market starts a sideways move that can take months but usually breaks out downwards into a correction of at least 20%.  Occasionally it’s less, like 15%.  It can be a lot more (like the dot-com crash).

Occasionally the sideways move is fast and results in an upwards breakout that extends the bubble.  You can get a few of these extensions (as at the top of the dot-com bubble) before a bigger crash.

QQQ is a Favorite to Put In a H&S with a Triangle Right Shoulder Here (Green Scenario)

QQQ is a Favorite to Put In a H&S with a Triangle Right Shoulder Here (Green Scenario)

QQQ is potentially putting one of the strongest possible topping patterns on its daily chart—a head and shoulders with a triangle right shoulder.  The likelihood of that topping scenario is increased by the big red candle QQQ put in a June 9.  That was a Neely short set-up for a retrace of the move out of the February 2016 low.

QQQ Needs a Retrace to the Bottom of its Light Blue Rising Wedge and Navy Blue Megaphone VWAP

QQQ Needs a Retrace to the Bottom of its Light Blue Rising Wedge and Navy Blue Megaphone VWAP

QQQ needs a serious stab at a retrace to VWAP of its navy blue long-term megaphone, which started forming in July 2014, to be legal for an upwards breakout from the megaphone (green scenario).  That would also retrace the light blue rising wedge.

QQQ could also go all the way for the navy blue megaphone bottom, but the fast topping process in the green scenario would make that scenario less likely.

The purple scenario becomes more likely if QQQ goes for delay and a more extended topping process.  The charts are aligned beautifully with Sornette’s call.

VZ Megaphone False Top

Falling Wedge to Blue Rising Megaphone Bottom

VZ has Formed a Falling Wedge to its Blue Rising Megaphone Bottom

VZ has Formed a Falling Wedge to its Blue Rising Megaphone Bottom

VZ has formed a falling wedge to its light blue rising megaphone bottom.  It’s tagging the bottom of that falling wedge today.

The move down can’t end on an exact tag of that wedge bottom.  So VZ could pierce the wedge bottom a bit or form a megaphone bottom from here to tag the bottom of the light blue rising megaphone and then take off upwards past the July 2016 high.

Or VZ could break out the bottom of the falling wedge and through the bottom of the blue rising megaphone back to the red megaphone VWAP and reverse there for a trip back to the all-time high.

Neely Long-Term Set-Up Targets at Least the All-Time High

VZ has a Neely long-term set-up on the chart for a trip back to at least the all-time high.  The set-up is the crash into the 2002 low, partial retrace of the crash with extended topping, then retest of the 2002 crash low.  After that retest you’d expect to see a return to the all-time high and the price could go well beyond that.

If VZ retests the red megaphone VWAP, we’ll likely just be redrawing the blue rising megaphone.  If VZ turns at or above the blue rising megaphone bottom, it will be putting in a rising megaphone extension within it.  Either way, VZ should be setting off soon on a major move up.

A Breakout Through the Navy Megaphone VWAP Suggests a Substantial Higher High

VZ essentially bogged down at VWAP of its dot-com megaphone top (navy blue megaphone).  The red megaphone is part of a major bottoming complex and is now legal for an upwards breakout targeting the 85-90 area or higher.

Potential Sornette Melt-Up Set-Up

If VZ makes it back to the red megaphone VWAP, it will also have formed a Sornette melt-up set-up.  A breakout through the July 2016 high would suggest not only a huge move, but an extremely fast one to at least the target area.