S&P 500: Potential Head And Shoulders
Trader Moe | Apr 01, 2015 10:54AM ET
S&P 500 Bounced Off Pink Triangle Bottom Overnight to Retest Red H&S Neckline
ES bounced off its pink triangle bottom overnight and ran up for a retest of the neckline (red) of the head and shoulders that broke out late yesterday.
It could just reverse here, break out downwards through the pink triangle bottom and bright blue megaphone VWAP, and run for the megaphone bottom at roughly 2000 before a bounce back to the VWAP at 2040.
After that retrace, it would likely head down to 1900ish and the bottom of the 3-year price channel.
If ES breaks the red H&S neckline, it’s most likely forming the purple triangle scenario. A triangle between the bright blue megaphone VWAP and the March 30 high would be very bearish. It would represent an extended topping formation, which represents systematic, disciplined, professional selling.
But if it gets through the March 30 high, it’s most likely going for the pink triangle top. That’s the only scenario that could be short-term bullish in this spot and it’s the least likely.
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