Saturday, January 16, 2010

1/16 - A Bearish H&S Setup?? :)

60 min



OK. First off, these charts are something I just dreamed up just for fun.

As you may or may not know, I like to post these H&S setups. So far E-mini has followed through a few times on a smaller scale. So why not SPX?

It's pretty clear that we have completed or are very near an intermediate top. Are we in P3 or is there even going to be a P3? Who knows.

What these charts assume is that we have begun P3 and with that, I see a potential series of H&S formations grinding lower as P3 unwinds down.

The daily chart I think is the cleanest of the 3 that captures what I'm trying to present. I apologize for the cluttered weekly chart (I didn't want to delete my labels).

As for the wave labels, I'm not sure if the waves down will be of Minor degree or if the larger waves are of Intermediate degree. I just put those out there as a rough guide/guess. The projections are not to scale time-wise either.

I think is is interesting though that each measured move for the H&S setups generally target key levels that have acted as resistance and support.

For example:

Blue H&S Target = ~1080
Red H&S Target = ~1010
Green H&S Target = ~860

This will be interesting to see a year from now how it all pans out.

Here's a little something on H&S patterns from StockCharts if you are not familiar with this.


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