$SPX in Head and Shoulder Pattern?
June 2, 2010 11:18 PM

S&P500 index is showing signs of positive momentum as it builds a Head & Shoulder pattern. From Oct. 2009 to Feb. 2010, $SPX formed its left-shoulder between 1050 and 1150. The Head part of H&S emerged from Feb. 2010 to May 2010 (1050 to 1200). S&P retraced to its neckline 1050 during the recent May sell-off. On Wednesday (June 02), S&P rallied over 27 points to close at 1098. This rally may be signaling positive momentum and upward direction for next two to three weeks. The height of the left shoulder is around 100 points and the peak of the Left shoulder level is near 1150. This area (1150) may act as resistance for the current rally. After the right shoulder completion, S&P may rollover towards the neckline. A retest/break below the neckline (around 1050) would signal completion of Head and Shoulder pattern. If H&S pattern materializes, the lower targets for the S&P is around 900.


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