SPX S&P 500 2-Hour Chart Potential Inverted H&S Upward-Sloping Channel

Markets continue along on a tortuous choppy path. Large point swings occur intraday and day to day due to the elevated volatility. The VIX dropped under 20 last Friday during the big rally and today spiked above 22 during the big selloff. Saw tooth markets like this are best watched from a distance with minimal trading since this behavior chews up bulls and bears alike.

The inverted H&S pattern remains in play shown by the black lines. The target is 1990-2000 for the inverted head and shoulders pattern after the neck line at 1905-1910 was violated to the upside. A back kiss would be expected and stocks are slapped across the face today falling back to the neck line for the back test. Tomorrow is critical, price will bounce or die from this level. A bounce and price will set its sights on the 1940 area again and then the higher target and gap fill. Failure from here and price will seek 1890 support then 1875.

The blue channel is in play; price is at the bottom rail of the channel and will make a bounce or die decision either to stay inside the channel or collapse lower to the 1890 and 1875 support levels. The prior price support where the two right shoulders are is 1875-ish. The indicators are not tipping their hand to any great extent; there are mixed signals. The indicators are weak and bleak except for the RSI that would like a little one candlestick bounce, but then some further softness in price should occur in this 2-hour time frame. Direction is a difficult call since it depends on oil prices. If oil decides to rally tomorrow then stocks will rally.

Price topped out five candlesticks ago but the MACD line was still long and strong wanting a higher high in price. The RSI never reached overbot territory. The collapse in oil prices have sent the stock market down the rabbit hole to begin the new week of trading; tomorrow is an important day. 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.