As discussed very early this morning, the H&S Patterns on SPX and ES have completed. The downside course is clear. The neckline is the same slope as all the other juicy H&S Patterns of the past few years (really!) and it bears a strong resemblence to the H&S Pattern of
SPX came within 10 points of its Fibonacci target — same as occurred in April 2010 and May 2011 before those big downturns.
SPX already broke the Dec 4 and Nov 20 lows, so the bullish harmonic scenarios are rather limited. ES, on the other hand, stubbornly refused to play ball — staying north of 1774.50 until just a moment ago.
It finally cut loose, only to stop way down at…wait, 1771.75? That’s not even 3 points. It isn’t even a Fib level, for crying out loud! Or, is it?
Turns out 1771.75 is one of those magic numbers that the bulls are hoping can turn the tide. It’s also one of those moves that MM’s live for, that are so meticulously well-planned that they separate all but the most paranoid traders from their hard-earned money.
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