FX:SPX500   S&P 500 index of US listed shares
126 0 4
Combined with earnings worries, inaction by the BOJ and a weak GDP release for Q1, the market decided to take a widely anticipated breather.

The events described above led to a 5-0 pattern which gave us the test of 1950 and a cypher pattern (sloppy) which typically fails after retracing 62% of the C to D line. This would put us in the 88/89 area where we have seen failure before at point A denoted by the highest dotted red line.

This, of course, assumes breaking through the 2084 area which will be no mean feat and also a level to watch for a failed retracement. It's also assuming staying below a higher developed channel line.

A failure at 88/89 should take us down to 38/40 where there is a floor of solid support and very near the 50 DMA located at 2033.
Comment: For your own benefit, remember than harmonic patters do not exist in a vacuum and I firmly believe understanding the reasons behind their formation are as important, or more important, than the pattern itself.
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