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A simple technical study of the weekly chart of $NYA or the New York Stock Exchange Composite Index (all NYSE listed stocks) — an index frequently used by technical analysts since it is weighted toward less speculative issues — shows that the recent market turmoil following the U.K.’s Brexit vote has formed what may be the right shoulder of an Inverted Head and Shoulders pattern. This type of bullish pattern typically marks a near-term bottom in the dominant trend (down) which then often leads to a reversal of trend (i.e., reveral to an uptrend).

In the chart below, you will see this IH&S pattern outlined.

Note that we have several other confirming indicators for a reversal to the upside. We have the Volume Balance indicator ranging near the highs and remaining above the 21 SMA despite the downtrend in price. We have a breakout in CCI along with bullish divergence off the Jan-Feb lows. MACD has also broken out of the downtrend and has moved up while price has consolidated. All of this confirms the IH&S pattern as having strong potential to reverse the trend to the upside.

The daily chart of $NYA posted below (it is taken from an article by senior technical analyst, John Murphy), shows OBV leading price higher, suggesting that a breakout in price is immanent:

Thus despite the day to day volatility we are now experiencing, the longer-term chart of the $NYA, which represents the bulk of the U.S. economy, suggests that there is more upside ahead. Keep in mind that this is a WEEKLY chart, so we are not expecting an upside breakout to happen immediately. Weekly chart patterns can take months to form properly. But it does look like, from today, that the right shoulder is nearing completion and that the technical indicators are leading price higher in the near-term.