S&P 500 Completing a “Hulkamania” Formation

Savvy technical analysts might have noticed that the S&P is completing a “Hulkamania” formation (chart courtesy of my most loyal reader, @Bonesnyc, via his colleague @JMBlandJr ‘s MS Paint skills):

 

Obvious Hulkamania Formation

 

What does this mean?    Well, it means that the market is likely to be driven by a lot of hype, cheerleading, noise, and fake manipulations.   You’ll be riding high, printing PnL by daytrading $TVIX, $ZNGA and $LULU, prognosticating on the future value and accounting scandal outcomes for $DMND and accumulating adoring Stocktwits followers.   You’ve just body slammed Andre the Giant, for goodness sake –  you’re on top of the trading world.   Suddenly, out of nowhere,  you’ll be getting pile-drived into the mat by Mr. Wonderful Paul Orndorff, or having a guitar crushed over the back of your neck by the Honky Tonk Man as Mean Gene screams in horror.   You’ll start to have back, neck, knee problems – the PnL won’t be coming in so steadily anymore.

Eventually, the chart will start to look like an old lady who has been out in the sun for too long, and the pattern is likely to collapse in a sad blaze of glory that will leave former supporters shaking their heads and asking out loud, “How could this happen? Hogan Knows Best?   Is there no limit to the shame? OH THE HUMANITY…”   Sorry – I got lost for a minute there – where was I?  Oh yeah – Hulkamania formation:  beware, as once the tide turns, the “heel” side of the market can smack fans in the face and betray them faster than you can login to Etrade and puke your positions.  Suddenly you’ll be staring at the evil New World Order Hulkster, wondering how he could have done this to you, and searching for your evaporated PnL as your $BVSN borrow gets recalled and you’re forced to cover your short at the top.

The good news is that as long as the internet is alive and well, no one will be able to take this from us:

 

 

Oh – and a word of warning for eager short sellers: the Hulkamania formation can continue for longer than you can remain solvent…

-KD

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