If the H&S should play out, it would target around 2060 — which is coincidentally (or not!) the SMA50 and might allow a backtest of the broken falling gray channel.
Ultimately, I think we’ll see backtest of the falling gray channel as we suggested last Wednesday.
With the e-minis off as much as 20 points earlier this morning, the stage is indeed set for our target — the SMA50 — to be tested.
As we discussed in yesterday’s members’ section:
…at this point I’d have to go with more downside before the big bounce gets started in earnest. The SMA50 at 2062 would be a good starting point, though the gray channel backtest at 2055-2057 is more appealing.
From there, the “market’s” next moves might surprise a lot of traders.
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