We have a double bottom in the S&P 500 chart. This double bottom adds further strength to S&P 1040 support level. We are now getting a bounce off support.
Risk levels remain quite high for now. While the market will, more than likely, rally for a couple days, investors are very skittish.
The market is in a trading range between S&P 1040 and 1106. It is prudent to wait until the market develops a trend before jumping back in.
Furthermore, a bearish head and shoulders pattern may be developing. Should the current rally takes us up around the S&P 1150 vicinity and then fail, falling back to the current support, we will have completed the right shoulder of this high probability and ominous bearish chart pattern. We will be watching the situation closely.
Furthermore, a bearish head and shoulders pattern may be developing. Should the current rally takes us up around the S&P 1150 vicinity and then fail, falling back to the current support, we will have completed the right shoulder of this high probability and ominous bearish chart pattern. We will be watching the situation closely.
(Click on chart to enlarge it for easier viewing)
Head And Shoulders Pattern
What Does Head And Shoulders Pattern Mean?
A technical analysis term used to describe a chart formation in which a stock's price:
1. Rises to a peak and subsequently declines.
2. Then, the price rises above the former peak and again declines.
3. And finally, rises again, but not to the second peak, and declines once more.
The first and third peaks are shoulders, and the second peak forms the head.
Investopedia explains Head And Shoulders Pattern
The "head-and-shoulders" pattern is believed to be one of the most reliable trend-reversal patterns.
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