SPX S&P 500 2-Hour Chart Gap Potential Inverted H&S

Since the 2-hour chart has been a focus the last few days as a bottom was developing, we may as well continue that theme. The initial bounce from the positive divergence occurs from the prior chart but remember that the MACD line was looking shaky not exactly convinced the bottom was in. That was Tuesday afternoon then boom, the bottom falls out in price into the closing bell (long red candlestick five candlesticks ago).

When price came down clearly making lower lows as compared to the prior day, the indicators are all possie d, including the MACD line that flatlines and whammo, stocks recover receiving the positive divergence launch fuel (green arrow). The indicators are long and strong pointing to higher highs after any pull back in this 2-hour time frame.The MACD line cross occurs which is bullish.

The brown lines show a potential inverted H&S (head and shoulders pattern) needing a right shoulder at that 1900-ish area. If that occurs, then if price punches up through 1943, with head at 1867, that is 76 handles, so the target for the inverted H&S would be 2019 call it 2020.

The lower standard deviation band was violated so a move back to the middle band, at a minimum, is in play, and look at how fast that line is dropping now at 1958. So price will want to at least touch this line in the 1945-1958 area tomorrow. That juicy gap is at 1964-1971 so that will likely want filled. The 2-hour chart is constructive for further upside. If price pulls back down it may be a move to simply print a right shoulder as the brown bar shows in the right margin. 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.