The market has meandered as expected, per my last discussion of its potential (and likely) paths. Now it looks like $SPY ($178.4) has made a short term bottom, which will propel a multiday bounce to complete the bearish Head & Shoulders top’s right shoulder formation…
That $177 support level has proven itself significant. As I noted yesterday, it will serve as a foundation for a multiday rally. Naturally, that means a shorter-term bottoming pattern is setup in $SPY, wherein the 15min has hammered-out a little fulcrum bottom that’s nearing its right shoulder as we speak. To complete that pattern, SPY should test its $177 neckline again here soon, before taking-off higher up to the primary, daily H&S right shoulder ~$182.
Weekly indicators remain bearish.
This is the first, unambiguous technical setup I’ve seen during this correction, so I have higher conviction as to SPY’s path henceforth. As I said on Wednesday, SPY’s reaction at that $182 right shoulder is the signal I’m watching, and this aggregate technical setup says there’s a high probability of breakdown into a correction from there.
Update (16:00 EST)
Good close for my thesis, as SPY hit that 15min fulcrum bottom’s R shoulder ($179.3), then plummeted into the close @ $178.18: