SPX 2-Hour Chart H&S Pattern

SPX 2-hour chart shows the ongoing Head and Shoulders (H&S) pattern drama. The purple lines show the head at 1515, neck line at 1495, thus, 20 handles difference, so the target is 1475 if 1495 fails.  Price dropped to test the strong 1498 support yesterday but the underlying bullishness in the markets pushed price higher. There is a lack of sellers in the market, the dips are being bot along the way, a slow sluggish grind higher. The absence of sellers are likely creating air pockets underneath.

The red lines show the negative divergence spank downs over the last few days that created the left shoulder, head and right shoulder of the H&S.  The indicators are in a sideways mode now, a mixed bag. The stoch's want lower prices but the ROC is more agreeable to price buoyancy. With the weakness in the euro, now under 1.34, the assumption is that equities should weaken. Perhaps a test of the critical 1495-1498 will occur today which would determine the fate of the markets for the days ahead. Watch to see if the RSI and/or stoch's lose their 50% level, or not, which provides a hint on market direction. 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.

Note Added 2/8/13 at 2:36 PM:  The bears thought they had something going with the H&S but their dreams were shattered after the opening bell when price exploded above 1413, then 1417, to print a new intraday high for 2013 at 1518.31.  Obviously, the H&S above is negated.  However, in technical analysis, as in life, one door closes and another door opens, so the high print at 1518 can now serve as a new head, and the 1515-ish stuff over the last few days is the left shoulder. A right shoulder will be needed early next week then perhaps the trip lower to test the 1495 neck line.