This chart looks at the NYSE Composite index over the past 20 years, highlighting hanging-man patterns, where they have taken place and what typically happens following this pattern.
Monthly hanging-man patterns took place near the highs in 2000, 2007 and 2011 at each (1). The average decline following this pattern was around 38% over the past 20 years.
The Power of the Pattern has been sharing this pattern for the past 9 months with our members, as a monthly hanging-man pattern took place in February at (2).
With this pattern in play, the odds increase that the NYSE index will decline a good deal further if support breaks at (3).
Will the results be different this time? We think that the support test at (3) is very important for this broad-based index.