SandP 500 Index Head and Shoulders Formation

2 août 2018

SandP 500 SPX500USD

The head and shoulders formation mentioned in earlier posts has duly formed its right shoulder over the last 24 hours or so - it's higher than it should be for a perfect H&S but nevertheless it still looks quite powerful.
It carries with it a minimum downside target at 7242 which is close to the fixed support line at 2740.

It was a sell once the neck-line broke at 2797 back to the 2790 line for a quick scalp - sorry, was too busy with Bitcoin update to get an S&P update out quickly enough.

Right now it's holding up from a low at 2789 but the counter-rally cannot be trusted.
The mood is still febrile, animal spirits to the fore.
Earning season makes for jumpiness, not helped by Trump's level playing-field mantra playing out across the airwaves.

It's time to look for the next best opportunity from here...
Ideally the S&P will rally further back towards the neck line at 2797-2800 range around the US open before falling away again to the downside target.

And if we don't see the counter rally as above we need to be ready to short once the 2787 level is broken with stops above here by 4 points or so.

We should get some action today.
Get ready!

*For updates to major markets in real time over the Summer hiatus please see link to Global Markets at top-left of main page.

31st July Update
We also have Apple numbers after the close which should give some succour to the bulls today.
It can therefore counter rally to 2809 and above to the parallel immediately above it at likely best before it comes off again.

Eventually it should break the little dynamic underpinning the current counter rally and fall away to 2796 at least and more likely to the 2790 line where it should bounce again. A quick scalp at likely best.
If so it will start to form a potential head and shoulders - perhaps waiting for Apple numbers - which may then go on to create the right shoulder.

Still too sketchy right now to know that though.
At any rate cannot trust the rally yet - at least until we see a restest and double bottom form at 2796.
So far this looks like a dead cat bounce.
Was hoping for better clarity here, looking for a better/bigger short from higher up.
But Apple's figures may just upset that apple cart and muddy the waters even further.
Looks like scalps at best again so far today : (