Timeframe Matters

• stevenplace
• June 30th, 2009

It seems that everyone and their mother is now following the head and shoulders pattern forming on the daily chart on SPY. They head over to Investopedia, read a couple paragraphs about this magical pattern, and risk management seems to become an afterthought.

Anyways, here’s The Pattern:

And I’m not discounting the pattern at all. But zoom into a smaller timeframe, and I see this:

This game may be a little harder than it seems.

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