In yesterday’s post, I highlighted how current price action looks eerily similar to 2008. Today I would like to produce a nice post by Michael Harris that emphasis the fact that if it looks similar, it may not always end up doing the same thing.

From a practical perspective, after the 2008 pattern there was another attempt for a test of the SMA(40 Week), enclosed in the red circle. Thus, there were two attempts to test resistance at the SMA(40 Week). The second test was at the same level where the double bottom was formed. This makes sense because that was a support level that turned into resistance, indicating a change in trend. However, in the second pattern this second test has not taken place yet. There are (at least) four possibilities:

(A) The second test never occurs. In this case we have two possibilities (A1) Prices reverse and rally ...