SPX Daily Chart H&S and Inverted H&S Patterns

This chart highlights all the head and shoulders (H&S) and inverted H&S patterns in play over the last year. The top in March-April 2012 created the red H&S which was satisfied at the June low.  The green inverted H&S off the June 2012 bottom targeted 1400 which was achieved, and so on.  The light blue inverted H&S iwth head at the 1350 November 2012 bottom, and neck line at 1460 targets 1570, basically where we are at now. The green inverted H&S was highlighted over the last couple weeks with head at 1488, neckline at 1525 which targeted 1562 achieved last week.

With the red rising wedge, overbot conditions and negative divergence in place now, just like the March-April 2012 and September-October 2012 tops, the anticipation is a move lower for the broad markets at which time H&S's can be identified for potential downside targets. The 1525 is a key pivot. Selling volume is ruling the day lately despite the slow-motion melt-up which hints that distribution is taking place (smart money distributing shares to the bag holders now showing up). 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.