We are at the neckline. If the pattern is valid and we break below the neckline, the target is 71. I shouldn't have to mention what a fall from 80 to 71 would mean for gold and silver.
Showing posts with label Head and Shoulders. Show all posts
Showing posts with label Head and Shoulders. Show all posts
Tuesday, September 21, 2010
Monday, May 31, 2010
$SPY - Head & Shoulders Pattern Forming?
As indicated in the chart below, the put-call ratio is overly bearish which sets up nicely for a rally in the S&P. In addition, several other indicators show that we might be due for a rally.
If we get a rally over the next several weeks, I'll be watching how the S&P interacts with the 1150-1170 levels of former support and resistance, as well as the 50-day moving average (currently at 1163). Should the S&P fail to break through these levels and start to retreat, it will form the right shoulder of a head and shoulders topping pattern, which would be immensely bearish.
If it forms, this right shoulder should complete well ahead of Terry Laundry's August 26 projected top date.
If we get a rally over the next several weeks, I'll be watching how the S&P interacts with the 1150-1170 levels of former support and resistance, as well as the 50-day moving average (currently at 1163). Should the S&P fail to break through these levels and start to retreat, it will form the right shoulder of a head and shoulders topping pattern, which would be immensely bearish.
If it forms, this right shoulder should complete well ahead of Terry Laundry's August 26 projected top date.
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