A Thousand Words

I do believe a picture is worth a thousand words. Take a look at this picture. It is a weekly longer-term chart of the S&P 500 ($SPX | Quote | Chart | News | PowerRating). Needless to say, this most important index is tracing out a classic head-and-shoulders pattern. A break below September's lows completes the pattern... which, by the way and not so coincidentally, was near the lows of October '98.

If you like adventure, you may want to look at an even longer-term monthly chart. This looks even more worrisome as you can then see the parabolic move from early 1995 to early 2000. Simply put, if support does not hold, what has been some of the ugliest action I have ever experienced will only become worse.

Don't you love a report like this before a holiday?

Gary