S&P500 short-term: A complex correction?

Corrections by definition are complex creatures. They will toy with your thoughts and emotions, cause enormous whip-saws, and are generally not good for a trader's account balance! When the uptrendline from Friday broke down yesterday, i was looking for a tiny back-test and a swift drop to test the lows. Swift drop there was.. but quickly reversed off 1060 pivot for an extended back-test.



Suprising strength. In addition, Financials were holding up stronger than the broader indices - not a good sign for bears, as they tend to lead the way down in declines.

Yesterday's strength, coupled with the greens in asian markets today, opens up the possibility of a Triple Zig-Zag like structure, with a c of C upwards to come.

Head & Shoulders?

Have a look at the chart again. If we drop today to 1060, a Head & Shoulders (with a target of Friday's lows) could be setting up. Head is roughly where you see the 'A', and Neckline(not drawn on chart) around the 'B'.

Inverse Head & Shoulders?

A smaller inverse H&S could be setting up too in the very short-term. Look to the right side of the chart. This time, the head is where the 'B' is, and neckline at 'A'. Slight drop to 1065, then a break of 1071 would confirm it(with a target around 1084).

Not the neatest of patterns, but who knows. Isn't this fun?!

Trendlines for today

Watching the upper trendline resistance around 1076, and support from the new uptrendline coming in around 1065.

All of the above is very short-term. Medium-term, it's a downtrend. Good luck today!

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