• 273 days Could Crypto Overtake Traditional Investment?
  • 278 days Americans Still Quitting Jobs At Record Pace
  • 280 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 283 days Is The Dollar Too Strong?
  • 283 days Big Tech Disappoints Investors on Earnings Calls
  • 284 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 286 days China Is Quietly Trying To Distance Itself From Russia
  • 286 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 290 days Crypto Investors Won Big In 2021
  • 290 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 291 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 293 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 294 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 297 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 298 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 298 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 300 days Are NFTs About To Take Over Gaming?
  • 301 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 304 days What’s Causing Inflation In The United States?
  • 305 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Is That A Head And Shoulders Top I See?

Is that a head and shoulders top I see on the S&P500?

Figure 1 is a weekly chart of the S&P500. Prices have probed the support zone between 1066 and 1072, and so far we have yet to close on a weekly basis below this "key" support level. From a point of having market participants express grave concern that the world is coming to an end, it would certainly be nice to have prices close below these levels. It's bad enough that prices are already below the 40 week moving average on the S&P500. (For the record, the NASDAQ 100 and Russell 2000 are above the 40 week moving average - thank god for that too!).

Figure 1. S&P500/ weekly
Possible H&S Top in S&P500

In any case, "they" - and whoever "they" is - just won't let the market fall apart. So I guess we go higher, but from this perspective, going higher without having the "decks all cleared" of market participants first will likely lead to more bouts of abrupt selling in the future.

So we go higher to make what appears to be the right shoulder of a head and shoulders topping pattern. What happens after that is pure speculation. What I would like to see happen is 1) a break below the neck line of that head and shoulders top; 2) a "puke" by the bulls; 3) CNBC calling the correction a bear market. Then we can make a better bottom.

All this will take time and play out through the summer and likely come to fruition in the fall. By that time, everyone and their brother will know about the head and shoulders top.


Back to homepage

Leave a comment

Leave a comment