The S&P 500 closes the Monday, 6/3/19, session at 2744 at the 150-day MA support at 2746. Price will bounce or die from this level. S&P futures are up +12 about 2 hours before the Tuesday opening bell so it looks like bounce. The 200-day MA at 2775 serves as overhead resistance; ditto the 2800 level which is the neckline of the H&S pattern failure. Price did come up for a quickie back kiss of the neckline the day after it failed but the door remains open for a more substantive back test of the 2800 level.
The blue lines show a two-leg bear flag pattern. Typically, the middle consolidation flag, or zone, should be flatter and more extended, but it is close enough for government work. The first leg is 2952 to 2810 a 142 point drop. The sideways consolidation with an upward bias occurs and then price rolls over again. The second leg top is in that 2877-ish area so taking away 142 is a 2735 downside target for the two-leg bear pattern and that occurs yesterday with a LOD at 2729 satisfying the pattern.
Price may want to chop sideways for a few days as the Fed plays central bank games and President Trump plays trade games. 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 Wednesday Morning, 6/5/19, at 6 AM EST: On Tuesday, the SPX gains 59 huge points, +2.1%, to 2803. The Dow Industrials climb 650 points intraday. The shorts are covering adding more rocket fuel for the upside. The H&S neckline is back tested. Fed Chairman Powell promises easy money forever so the stock market catapults higher and America's wealthy class, that owns large stock portfolios, dances with glee. One half of American's do not own a single share of stock. The VIX ends at 16.97.
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