Everybody is talking about the head-and-shoulders pattern on the SPX. Danaric has a chart here, and The Fly has his opinion here. However, SPY has also formed a smaller, inverse head-and-shoulders recently (click chart to enlarge):
Notice that SPY bounced exactly where it had to bounce: the 91.27 low from June 26th. And it rallied into the close on strong volume. That is bullish action, so it’s important not to discount it. Especially since this pattern projects up to the June 11th peak.
Which H&S wins? It’s impossible to know that, but crucial to be mentally prepared for either outcome. The topping pattern is much larger and should carry more weight. But it is possible that Wednesday will be a consolidation day while the market awaits Thursday morning’s jobs report to decide the matter. The consensus is for another 350,000 jobs lost, and a jump in the unemployment rate to 9.6%.