Any time a price pulls back to a line from which it had broken out just before, I call it the “return to the scene of the crime.” It applies in both directions, and at any time frame. It happens A LOT. I think most of the time.
So yesterday that’s what happened. When the price holds around that level, and resumes in the direction of the breakout, we’ve had a successful test, and it usually means that the trend has farther to go, sometimes a lot farther.
But sometimes the crims just hang around the crime scene waiting for TV reporter to come over and ask if they were there and if they saw anything.
That’s when things often start to fall apart. The reporter asks the guy’s name and he says Heywood. Is that your first or last name? First, the guy says. So the reporter asks for the last name, and the guy says, Jablome. Heywood Jablome.
When the market is the guy, and he says that name, Heywood Jablome, you know that you’re the sucker.
On Monday, the market broke out. Yesterday, it pulled back to the breakout line, and here in the pre market it has gotten off that line, weakly so far. Stay tuned to find out whether the reporter questions Heywood, and what he says. I’ll be here to report back to you.
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