The S&P 500 had a very humble breakout from the inverse head and shoulders pattern we identified yesterday. Recall that we noted an inverse H&S pattern with a neckline at 4068. We suggested that if it broke out from this, we could easily test the 4100's. We did see a bit of a bounce past 4068, but nowhere near the momentum we'd expect from a breakout. Indeed, we weren't able to even clear 4100 before running into resistance. Though the Kovach OBV has tapered up slightly, this is nowhere near the momentum we'd like to see off a proper breakout. If we reject the breakout it is a very bearish sign indeed. We could easily retrace through the vacuum zone to 4009, or even test the 3K's again. If we are able to break out, then 4122 and 4144 are the first targets we will have to break before considering higher levels.
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