Despite all the upside since Dec 24 lows SPY might be forming an H&S formation on monthly chart. Here are my observation as to why this migh be the case
Left Shoulder: January 2018 high formed a left shoulder. January peak failed and stopped right at the SPY uptrend (in this case illustrated by 5 EMA.
Head: After the Left shoulder formation market formed new high but ultimately failed and breaking the SPY uptrend and forming a head of the formation.
Right Shoulder: This brings us to the current formation of the right shoulder. After making a low on December 24 (~248 which if the pattern is true is now a neckline) SPY is rapidly approaching the resistance of ~$268. (Also overhead is a 5 EMA of 270).
If the pattern is correct SPY will fail at the resistance and goes back to the neckline of 248.
Once neckline is broken the expected move 14% (shown by the yellow line which is measured as distance from head to the neckline)
Feedback and comments are welcome.
Let's see what happens in the coming month.
Left Shoulder: January 2018 high formed a left shoulder. January peak failed and stopped right at the SPY uptrend (in this case illustrated by 5 EMA.
Head: After the Left shoulder formation market formed new high but ultimately failed and breaking the SPY uptrend and forming a head of the formation.
Right Shoulder: This brings us to the current formation of the right shoulder. After making a low on December 24 (~248 which if the pattern is true is now a neckline) SPY is rapidly approaching the resistance of ~$268. (Also overhead is a 5 EMA of 270).
If the pattern is correct SPY will fail at the resistance and goes back to the neckline of 248.
Once neckline is broken the expected move 14% (shown by the yellow line which is measured as distance from head to the neckline)
Feedback and comments are welcome.
Let's see what happens in the coming month.