SPX 2-Hour Chart Sideways Channel Potential H&S

SPX 2-hour chart shows the month-long sideways channel during March and April.  Then the wild upside move last week to print new all-time highs occurs as the BOJ weakens the yen. On Friday, price dropped out of the rising red wedge as would be expected from this pattern and the overbot conditions and negative divergence helped create the move lower as well. The chart is agreeable to sideways ahead, however, the S&P futures are down about nine at this writing, so a drop to test the strong 1576 support may be on tap. Remember, 1576 was the old multi-year all-time high printed in October 2007 and taken out last week. A back test of this important level is needed anyways.

Support in that area is 1576, 1574, 1569-1570, 1563-1565, then 1553-1556. The SPX may want to come back down to reestablish the sideways channel through 1540-1565. The potential H&S pattern is under development (pink lines) with head at 1597, neck line at 1540, so the target would be 1480-ish if the 1540 level would give way. The H&S will need a right shoulder moving forward. 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.