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SPX Inverted H&S

This morning, I said that there were no reversal patterns in sight, but today’s action has changed that. As George pointed out, there is a potential inverted head-and-shoulders reversal pattern forming on the SPX chart. Here is how it may develop (click to enlarge):

A bullish resolution would target the 1120 area, while a violation of the left-shoulder 1078.46 level could be rather nasty. But look at the two purple arrows; they are pointing to a series of declining peaks which shows that there is no neckline yet. So, the pattern is in the very early stages of forming, if it forms at all.

Also on CNBC today, Bob Pisani said that the estimate for Friday’s jobs number was -40,000. I don’t know why he said that because that is actually the lowest estimate in the range, which is -40,000 to +75,000. That makes me think that the floor traders fed that number to Pisani because they are leaning short. And that might be an indication of the crowd leaning short, and perhaps being ripe for a squeeze.

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This entry was posted on Monday, February 1st, 2010 at 10:40 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

9 Responses to “SPX Inverted H&S”

  1. George says:
    February 1, 2010 at 10:47 pm

    Here’s the SPY 5min Moo and Doo chart. I’ll soon change it to a 15min due to running out of screen space on the 5min.

    http://i50.tinypic.com/2vt7j9h.jpg

  2. paula says:
    February 1, 2010 at 11:00 pm

    George,
    “The Catcher In The Rye” sold 58 million copies.
    Your book with the new “Holden” K on the cover
    will do better.

  3. George says:
    February 1, 2010 at 11:11 pm

    Yeah, can’t wait! I think I’ll sleep on it… :)

  4. K says:
    February 1, 2010 at 11:20 pm

    George let’s split the 0.99 :D

    I choose not to believe this inverse heads and shoulders haha :P

    night!

  5. paula says:
    February 2, 2010 at 12:21 am

    $Trillion dollar deficits…will the tsumani from
    Greece hit the U.S.A.?

  6. 2thfixr says:
    February 2, 2010 at 7:09 am

    Nice chart Matt. That would fit nicely with the a-b-c pattern EWavers are looking for in the wave we just started and seems to fit the retracement target of 1116-1125 as well. Nice pick up. And it could be a great trade given that large range to play in!

    Nice call on the bounce on Friday close too Matt.

  7. after says:
    February 2, 2010 at 8:11 am

    Futures Prices
    Market Last Change %
    Crude Oil 75.21 +0.78 +1.04
    Natural Gas 5.508 +0.074 +1.36
    Corn 359.00 +2.5 +0.70
    Soybeans 909.75 -4.25 -0.47
    30yr Bond 118.09375 -0.0625 -0.05
    10yr Note 117.859375 -0.296875 -0.25
    NY Gold 1113.5 +8.5 +0.77
    NY Silver 16.735 +0.075 +0.45
    Emini S&P 1090.00 +3.75 +0.35
    Emini Nasdaq 1762.00 +6.25 +0.36
    Emini Dow 10161 +24 +0.24

  8. George says:
    February 2, 2010 at 8:48 am

    Thanks After, up, up, and away. Well, for a while anyway.

  9. George says:
    February 2, 2010 at 8:49 am

    Matt,

    I hadn’t even thought of looking at a higher time frame to confirm the H&S. Good show!