Blackstone Executive Vice Chairman Tony James says he's less optimistic now than before that the U.S.-China trade war could be resolved, but even a smaller deal could help...World Economyread more
The massive market transformation this month that some on Wall Street called a "once in a decade opportunity" might have just been a one-off technical move because of taxes.Marketsread more
The Pentagon will deploy U.S. forces to the Middle East on the heels of the attack on Saudi Arabian oil facilities, United States Secretary of Defense Mark Esper announced...Defenseread more
CNBC did a deep dive through the most recent Wall Street research to find stocks that analysts say are underappreciated.Marketsread more
Shares of MasterCard are up 46% this year, and 1120% since 2011, getting a boost from the strong U.S. consumer.Investingread more
CNBC sat in on an "empathy training" at Amazon PillPack's Somerville offices, which is part of new hire orientation.Technologyread more
Trade with China is the 'big unknown' for the Federal Reserve as it decides how best to support the U.S. economy, says Council on Foreign Relations Director of International...Futures Nowread more
Lobbying experts said the visit is likely an attempt to be in lawmakers' ears as they consider legislation that would impact Facebook.Technologyread more
Yardeni Research's Edward Yardeni believes the U.S. economy is picking up steam.Trading Nationread more
Iran's audacious drone and cruise missile attack on Saudi Arabia's oil producing facilities has provided a critical test yet for the Trump administration's foreign policy. A...Politicsread more
The most simple and reliable chart pattern out there is one that Jim Cramer dreads.
Unfortunately, Cramer learned not to ignore the head-and-shoulders pattern the hard way when his charitable trust bought Alcoa in the low teens in 2010, and ultimately took a loss because it was too early to buy.
"Yes, just like a human's head. That is the most frightening pattern in the chart book," the "Mad Money" host said.
Alcoa's stock had a healthy run from winter of 2010 until February 2011, rising to $17 from $13. The stock ran to $18 on the eve of its quarterly earnings report, and Cramer thought it was a fine quarter when it reported.
Yet, what worried him was that even after an initial positive reaction, the stock dropped. So, a few days later, Cramer assumed it would take out its $18 level and went back to buy more.
Cramer was wrong — extremely wrong.
What Cramer didn't realize is that the fluctuation in price had traced a perfect head-and-shoulders pattern. And no, this isn't referring to the brand of a shampoo.
It turns out that during that period when the head-and-shoulders pattern was forming on Alcoa's chart, Europe and China began to slow down, and aluminum was in a glut. Ultimately, CEO Klaus Kleinfeld could control his own company but not the price of the commodity itself.
Likewise, if a head-and-shoulders pattern signals trouble ahead, then an inverse head-and-shoulders pattern signals the opposite — a chance for glory.
"The key with this pattern is the neckline, the line that connects the high to the two shoulders. When a stock breaks out above that line it tells a technician that you are about to witness a big move higher," Cramer said.
At the end of the day, patterns matter. So when you see a head-and-shoulders pattern, no matter how confident in the stock you might be, Cramer believes you should sell. And when the reverse head-and-shoulders develops, then consider buying it.
That is just how powerful these moves are. The chart work is more often right than most would ever think possible.