Some of you might remember this post from May 4. I was struck by the Fibonacci relationships in both time and price between the last two major H&S patterns, and thought it confirmed my view that the H&S top was ready to play out.
The reason I bring it up again is that horizontal purple trend line cutting across the chart from the October high (which helped drive prices higher for months.) I don’t think it’s a coincidence that it’s at the same price as our H&S target — any more than it’s a coincidence that the latest pattern is:
- 1.618 the time of the previous pattern; and,
- .618 of the target price range of the previous pattern.
These Fibonacci relationships don’t tell us exactly what’s going to happen. But, they’re practically screaming “pay attention! This could be important!”
The obvious implication is that SPX will find its way down to 1289, the lowest of our targets initially presented over a month ago [see: Analog Details] — though I continue to believe TPTB won’t allow a dip below 1292 (too many bearish implications.)
I’ll post more after the close.