“Head & Shoulders” topping pattern forming in the Advance/Decline line?

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When it comes to Advance/Decline line patterns and listening to its messages, I am a big fan of watching support lines and watching to see if the A/D line is diverging against the broad markets. As you can see in the right chart, the A/D line remains above support dating back to the 2009 lows (a positive) and it has not had a big divergence against the broad markets for years. Last multi-month divergence was back in 2007!

On a short-term basis I am watching to see if the A/D line could be making a "Head & Shoulders" topping pattern (left chart). Humbly, I am not a huge fan of this type of pattern being applied to the A/D line. I do respect the pattern enough that I will listen to it and respect its potential, until this pattern proves differently. 

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Amazon breaks 5-year support, as weakness after Drone high continues!

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The Power of the Pattern highlighted several months ago that Amazon looked to have created a top at the same time the new drone was introduced on 60-Minutes at (A) above. As mentioned above, when the Drone was being introduced, AMZN was hitting channel resistance and a long-term Fibonacci extension level. While these two resistance points were coming into play, it also created a Doji Star topping pattern.

Lets now take a current look at what AMZN is doing. The above weekly chart reflects a break below a 5-year support line has taken place. This week it kissed the underside of this channel and failed to climb back into it, as it created a rather large bearish engulfing pattern at (1) above.

What does all of this suggest for Amazon going forward? I think Jeff's face says it all, as price action suggests lower prices are to come. This price action could be very important for the NDX 100, due to cap weighting!

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Fear Index (VIX)- 4th largest 5-day decline since 1990, says Joe Friday & Ryan!

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The VIX just experience the 4th largest 5-day decline in the past 24 years. My good friend Ryan Detrick, shared the table above, reflecting the 5 largest 5-day declines in the VIX since 1990.

Premium members picked up XIV as the VIX was creating a bearish wick at falling resistance.

Joe Friday-  When fear gets lofty at key technical levels, short it!

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