So, the Head & Shoulders Pattern worked out after all.  Miracles never cease.  Last night’s plunge below the neckline hasn’t been erased by the inexplicable Q2 GDP estimate increase.

USDJPY has reached the SMA10, so I suspect ES is thinking the same thing (1984.17 and rising fast.)  It does jibe with the red 1.618 and white .886 at 1984.  The question is timing, and whether we’ll stay in the red channel (tomorrow or next week) or we get a quicker plunge today.

SMA10 for SPX closed at 1982 yesterday.  Note the red H&S, and the yellow TL which will be broken on the open.

UPDATE: 12:00 PM

Watching a little analog here that suggests a drop to 1988.75 around 9:37, then a 2 pt pop before settling back to 1988 and a bigger bounce to 1991.25 (or SMA200 on 1-min.) Should get started around 12:09ish.

UPDATE:  12:20 PM

Never mind!  Looks like SPX needs to back test the yellow TL around 1998 (and SMA100 on 5-min) first.  This def kills off the falling red channel on ES, and puts ES/SPX back above their necklines: no man’s land with bullish implications.

It was an algo event, as Merkel confirmed Ukraine/Russia is worse.  You’re probably thinking: “Ukraine worse, Merkel talking more sanctions, that’s bearish…right?”  In a normal world, yes.  But, in a world where Citadel stands ready to prevent bad news from harming markets (or fleecing unsuspecting investors, take your pick) all it takes is a sudden order to sell a boat load of VIX futures (12.21 down to 12.07 inside of 10 min..)

And, once the “buy everything that’s not nailed down” algo gets started, it tends to take over for a while in a no-volume melt-up as the few remaining human investors watch and wonder how it could be…

That SPX 1989.59 H&S target is looking less and less likely.