Patterns in S&P500 Index

November 12, 2010 · Posted in 2B Patterns, ABC Bullish, Double Top, X5 Patterns · 1 Comment 

Here are potential scenarios from S&P’s daily chart patterns.

1. The most visible pattern in S&P since June 2010 until now (Nov. 12, 2010) is Inv. Head and Shoulders. Late Sept. SPX traded above neckline to confirm Inv. H&S pattern. The target for Inv. H&S Pattern is 1250 (100% of Necline to low of Head). This target is also inline with X5 target 1231-1246 (price cluster).

2. The current famous pattern is Trader Vic’s 2B (2T) Pattern. It is a form of irregular Double Top formation. First Top is from Late April at 1219 and the second potential top is on Nov. 5th at 1227. If S&P slides and closes below 1195 (also 21-EMA), it may confirm 2T pattern. The trigger for a short-trade is to enter the low of the bar which closed below 1195. Set a STOP above the Nov. 5th High + few points (1229-1230). Target is at least the 50% of swing range nearing the Neckline (or ‘B’ in X5 pattern). Ultimate target for 2T pattern is between 61-76 of prior swing.

3. Last but most vivid pattern is X5 pattern. It says, current slide may be just a pullback. In that case, next price cluster may offer some resistance (1231-1246). If price reverses from current sell-off and trades higher, there are two possible scenarios.

‘D’ is trading outside of XA range
A. Bearish Butterfly (Target 1.27XA to 1277).
B. Bearish Crab (Target: 1.62XA: 1350).

4. ABC Bullish pattern is also embedded in the X5 pattern. It shows the Price and Time Targets coinciding with some of X5 target ranges.

Disclaimer: The chart analysis provided here is for educational purpose only.