SPX 2-Hour Chart Fibonacci Retracements Head and Shoulders Patterns

The high for 2013 is 1531 occurring last Tuesday.  We watched the negative divergence form, and red rising wedge, and overbot conditions, that forecasted the spank down. The blue lines show the Fibonacci retracements.  After a sustained up move, markets will pull back, they always do, and the amount of that pull back determines the range to develop the Fib retarcements. In this example, that was the drop from 1531 to 1499.  This establishes a 32-point range used for the Fib percentages 38%, 50% and 62%, which produces the 1511, 1515 and 1519 levels, respectively.  The SPX blew up thru the 38% Fib on the Fed's Bullard's dovish talk and then bumped its head on the 50% Fib at 1515-1516 where it decided to spend the weekend and think things over.

The teal H&S shows a head at 1531, neckline at 1515-ish so target was 1499, achieved, so this pattern was satisfied.  The pink H&S is of interest with head at 1531, neck line at 1497 (you can draw it at slightly different places for different downside projections), which targets 1463 if the 1497 fails. The e-mini low is 1495, so the case can be made that destiny may require a test of the low 1460's support area. The 1499 is key since it is the 200 EMA on the 1-hour chart, an important bull-bear line in the sand. The 1520 is very strong resistance as shown with the SPX S/R data, and the 62% Fib is 1519, so keep a close eye on the 1519-1520 resistance on Monday.  A push up through would want to then test the 1524 R. The 1514-1516 level continues to play a key role, above are happy bulls, below are happy bears. The SPX wants to look at the China Flash PMI to decide which camp to enjoy on Monday. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.