S&P has managed the last 3 sessions to fool both bears and bulls. After the sharp upward movement from 1270 to 1335, the index is consolidating between 1305-1330. Taking into consideration wave (III) and (IV) as the left shoulder, wave (V) as the head and the recent consolidation as the right shoulder, if the neckline at 1330-35 is broken then the target is 1370 cash. Apart from this inverted H&S pattern, the upper pitchfork resistance also lies at the same level as the neckline that needs to be broken for a rally to happen.
On the other hand, intraday analysis of the last 3 sessions, shows another H&S pattern that if broken downwards the decline will be steep. For this bearish scenario to come true, the neckline of the bearish H&S at 1305-1300 must break. Target of this H&S is 1260-70.
According to our most possible wave count, we expect the inverted H&S to materialise and the index to finally break 1330-35 and move towards 1370. That will most probably be the end of wave 2. New highs above 1422 cancel this very bearish scenario.
Thank you for taking the time to read this post.
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