SPX S&P500 Weekly Chart; H&S

The SPX weekly chart is shown with the head and shoulders (H&S) pattern in progress. Price retreats after the head is placed at 4782-ish and then bounces off the neckline to come up and form the right shoulder. The SPX is spanked down by the Tweezer Top (purple circle) that was no match for the resistance at the 20-wk MA at 4550.

So the H&S pattern is in play and the question is if the neck will rupture, or not. With the head at 4782 and neck at 4360, that is a 422 difference, so the downside target is 3938 if the 4360 neckline fails (4360-422). Price comes down and ends the week, 3 weeks ago, sitting on the neckline (red candlestick). Then, 2 weeks ago, pandemonium breaks out. The neckline fails. Price collapses to the 4114 palindrome and bounces.

The price action is a quasi-back kiss of the neckline but something more substantive is likely needed where price comes up and back tests the neck line at 4360, on a weekly basis, to decide if it truly wants to go lower. The stock market is trading off news and emotion with Russia's war against Putin heading into the 13th day.

Last week's high was at the 50-wk MA at 4415 and price did not have the juice to get above this key moving average serving up resistance. The thick blue line is a gauntlet of support. The blue line at 4170-4185 has solid touches from 9 out of the 10 weeks between April through June (it has serious street cred). The dark blue line is a concrete floor. The SPX is at 4201 only 16 points from entering this key support range. Very bad things will happen in the stock  market if 4170 fails; the 3938 H&S target would be in firm play.

The 4200 level right now is key due to Keystone's 80/20 Rule; 8's typically lead to 2's on the way up and 2's typically lead to 8's on the way down. Thus, a breach of 4200 opens the door to 3800. 4220 was breached so 4180 is in play. 4202 was breached so 4198 is in play.

The gap at 4020-ish (blue circle) is big enough to drive a truck through and it will need filled at some point forward. Overall, the chart is weak. The red lines show the weak and bleak RSI that is in bear territory under 50% printing lower lows. The RSI is not yet at oversold territory so that hints at further downside, on the weekly basis.

The MACD and histogram remain weak and bleak agreeable to seeing another low in price on the weekly basis. The stochastics are positively diverged, by a sliver, this can easily turn weak and bleak tomorrow, and not yet oversold. The money flow is possie d sniffing around for a bottom.

Of course, Ukraine, and crazy dude Putin, the short guy with the Napoleon complex, will keep throwing markets to and fro vis-a-vis oil, wheat and commodity price gyrations. Putin has met his Waterloo as Stonewall Jackson would sing. Dirtbag Dictator Xi has to be sweating bullets in Beijing not only with omicron taking hold, but because of a potential food shortage with wheat prices through the roof. The past Chinese dynasties fell from food shortages which turned into bloody riots and overthrows. China has to feed 1.4 billion hungry mouths each day.

The RSI and MACD are weak and bleak and want to see another low on the weekly basis but price may bounce in the meantime, on the weekly basis, especially due to the possie d money flow, so a test of the blue line support gauntlet at 4170-4185 may occur, and a bounce, perhaps all the way back up to the neckline for a back kiss 4360, but the indicators want that lower low, on the weekly basis, so the back end of the month will probably remain soggy for stocks with lower numbers.

The bottom is not in on the weekly basis for a sustainable multi-week rally, until all the chart indicators are positively diverged, or, if positive news occurs with the war. 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 Tuesday Morning, 3/8/22, at 10:06 AM EST: The SPX is at 4170 slipping on a banana peel. Hold On Loosely, but don't let go. The bulls do not want it to slip away but it is. The major test described above at 4170-4185 is in progress. Who will win? SPX prints 4163 now bouncing back up for the back kiss at 4169. The tension builds.....

Note Added Tuesday Morning, 3/8/22, at 10:19 AM EST: The bulls say not so fast on your first try with the SPX moving higher to 4181.

Note Added Tuesday Morning, 3/8/22, at 10:21 AM EST: SPX 4195. Stocks are saved, for now. Sleepy Joe Biden is supposed to speak any minute placing a ban on Russian oil. Does that include salad dressing?

Note Added Tuesday Morning, 3/8/22, at 11:30 AM EST: SPX 4170. President Sleepy Joe Biden is speaking......... 4166 ........ 4165 ..... 4163 ..... 4160 ..... someone better give Joe the hook and get him off stage before the stock market crashes. He scares people when he talks, like Uncle Billy at last summer's reunion picnic.

Note Added Tuesday Morning, 3/8/22, at 11:50 AM EST: SPX 4182. Joe is finished speaking. Booiiinnngg. Price pops higher again refusing to fail from the 4170-4185 gauntlet of support. ...... 4186 ..... 4185 ......4190 ...

Note Added Tuesday Afternoon, 3/8/22, at 12:44 PM EST: SPX 4251. Bulls celebrate. The SPX tests the critical blue gauntlet of support and bounces strong.

Note Added Tuesday Afternoon, 3/8/22, at 1:57 PM EST: SPX 4207. The SPX explodes higher to 4277 and then falls on its sword collapsing back down to 4207. The VIX is at 35 so wild gyrations can be expected intraday and day to day. It is Tuesday Afternoon and time for the Moody's. No, not the Moody's you're thinking of, the band not the rating agency.

Note Added Tuesday Afternoon, 3/8/22, at 2:02 PM EST: SPX 4184. HOD 4277. LOD 4157. The S&P 500, the United States stock market, moves 120 points intraday.

Note Added Tuesday Afternoon, 3/8/22, at 4:37 PM EST: The SPX drops during the last hour of trading to end the day at ........ wait for it ......... no, wait a little bit longer for it ......... wait a bit longer....... you really should wait a bit longer for it ........4170.