Head and Shoulders Pattern on Monetary Base?

Now, don't take this seriously. The monetary base is not a stock that may follow or exhibit technical analysis patterns. Still, it looks to me like a "head and shoulders" pattern - a topping and reversal pattern - although the right shoulder is not quite defined. The target would be the height of the head subtracted from the neckline, or at $1.8 trillion, which is the level last seen in September 2009.


That level ($1.8 trillion) has previous supports, as you see in the graph. If the monetary base hits this target, Ben will undoubtedly unleash a full-on QE2, even though he or anyone at the Fed doesn't have a clue what's going to happen. For more about Ben's thinking, read this article by Gary North.

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