Bear Flag Head Fake

This is a longer term pattern that started as the market hit its October rally highs and broke down from there, a bear flag formed, it was very obvious and thus very likely to be gamed.

The flag pole starts at the top, a bear flag is formed, it breaks down as expected, drawing in shorts and then reverses to the upside. The dogma of technical analysis represented in 80 years worth or writing and probably hundreds if not thousands of books, "If a pattern fails, reverse you position", which means that those shorts went long and the market gave them a reason to believe. Now the bear flag has closed the gap and is doing exactly what the sentiment that created it intended, the only thing was the head fake in the middle courtesy of Wall Street and the fact that technical traders are so predictable in what they will do. THIS IS WHY WE MUST THINK OUTSIDE OF THE BOX. "To make money on Wall Street, you must see what the crowd missed"