Jul 192011
 

Yesterday’s session for the US markets was an important one. If the fall from the May highs was corrective yesterday’s low on the S&P 500 should have stayed above 1298. The fact that it did drop to 1296 is an indication the rally from the June lows was possibly an artificial rally manufactured by the powers that be. If you know a little bit of Elliott Wave you would know why this area should not have overlapped.

S&P 500 Daily Chart

Also the Phily Banking index, nose dived below the June lows.

Philadelphia Banking Index

We already have a Dow theory non-confirmation in July – transports made a new high while the Industrials did not. So if these interpretations are correct, over the next few days we should see further down sides for the S&P which potentially could go below the June low of 1258.

Inverse Head & Shoulder breakout

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Sep 212010
 

The S&P busted through the resistance level at 1131 and in the process completed the inverse head and shoulder pattern. While conventional measuring techniques provide a price objective of 1250, it is another topic if the S&P can take out the April high of 1220 and would go all the way to reach this price objective. I will try to do a post on this later after some more research.

S&P 500 - Inverse H&S breakout

In my Sept 2nd post, I did alert to the inverse head and shoulder breakout as one of the possible scenario and we also took note of several false breakouts  in the same post. Given that all through July-September the S&P has been rallying on low volume, we should be watchful if the market repeats this choppiness one more time. I’m not saying it will but a good trader is one who is prepared for all scenarios.