SPX Daily Chart Trend Line Failure H&S

Price collapsing under the pink trend line was a key failure. Price also fell under the 20-day MA, then under the 50-day MA reinforcing the bearish action. Price may want to back kiss the 20-day MA at 1399 before deciding to head lower. We have watched this chart play out over the last month as Keystone highlighted the black rising wedge and negative divergence that created the market spank down.

Note how the indicators all exhibit lower lows now (red circles) as compared to the last two months which forecasts much lower prices moving forward. This two-day rally can serve as a right shoulder of an H&S pattern (neon green lines); head at 1420, neck line at 1340, thus, an 80 point difference, so the target for the head and shoulders pattern is 1340-80 = 1260 target. This forms a confluence with the 200-day MA, as well as horizontal support, providing strong street cred for a target zone of 1260-1280 in our future, perhaps as we swat at the June bugs during an early summer picnic. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.