SPX S&P 500 Daily Chart; W Pattern Bottom

The W pattern bottom is one of the most powerful stock chart patterns for bulls especially when the W forms below both the 50 and 200-day MA's. The closing numbers at the bottom of the W are, say, at 3900, and the top of the W is 4080-4100, call it 4100 to keep the math simple. The W pattern is 2 hundo points tall.

The breakout occurs from the 4100 so the upside target to satisfy the W pattern is 4300-ish; call it 4280-4320. This area is exactly where overhead resistance is at from the late April early May price action. The upside 4300 target is also in the vicinity of the 50-day MA resistance at 4277 where it is logical for price to make a bounce or die decision.

The base of the W does not account for the long lower shadows on the darkest days so if the bulls can keep charging, the buying may turn into frenzy with shorts running for the hills creating more upside fuel, and the upside may be more like 3 hundo targeting 4400 which would fill the mid-April gap at 4390-4400.

Note how price parked itself at 4158 for the holiday weekend exactly at price support/resistance (S/R) since March (blue line). A prior chart showed the positive divergence forming forecasting the bottom in the stock market (green  lines) and voila, price bounces due to the possie d. It's not rocket science and Keystone knows rocket science. The indicators are now long and strong wanting price to make more highs.

The SPX should continue higher to satisfy the bullish W pattern. A test of the 50-day MA at 4277 would be expected and a battle at the 4277-4300 resistance. If price breaks through there, 4400 is likely next. Bears need to push the SPX below 4080-4100 to nullify the breakout from the W.

S&P futures are down 19 points with the VIX rising to 27.66.Volatility is higher so stocks are lower. If the W pattern is to work out, Fed Chairman Powell needs to get his jackboot back on the throat of volatility. Powell and Treasury Secretary Yellen are meeting with President Biden after lunch (cough; photo-op). 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 6:02 PM EST: The S&P 500 goes on a wild ride today down at the open, then up then fading into the close; a choppy day. Volatility, chips and banks are all that matter right now. Toss in copper, too.  Vol and chips went bearish this morning causing mayhem but then went back to the bull camp so stocks rally. Banks created more upside then whammo, banks lost their mojo creating sogginess in the stock market into the closing bell. If XLF runs above 35.58, the bigtime rally is on and a wild upside orgy will begin. If XLF, now at 35.47, hits its head on the 35.58 resistance and is spanked lower, the stock market will likely deteriorate and at that point watch the chips and volatility. SPX 4132. HOD 4168. VIX 26.19. SOX 3099 testing the 50-day. XLF 35.47.