Bearish SPY Head 'n' Shoulders Forming

This head and shoulders pattern is almost text book so far in its present development. Volume is up on the advance of the left shoulder and lower on the advance of the head. We're missing that extra warning of the increase in volume on the decline of the head. There is, however, very weak rise in volume on the decline of the right shoulder. Combined with weakening breadth I'm fully taking it as a bearish turn.

We still have to see that neckline support break convincingly with a nice rise in volume for the pattern to complete.

The "rough guide" price target is ~195.

Let's see what happens.
So… Is it now the time to get back in? Those CAPE ratios are still a bit high don't you think?
The volume pattern isn't very conclusive - the rally into the LS has very weak volume, the rally into the H has a little more volume and the rally into the RS has a bit more. Just the rally portion that goes into the highs, not the whole amount of volume from the low to the high, just the upper half of the rally phase. I like that you used OBV here since that is pointing down and arguing well for your point. Nice chart.
+1 Reply
timwest timwest
Here - I show it here...
+1 Reply
gurple timwest
Hi Tim. Thanks for passing by and adding your thoughts. All things considered, nothing seems especially convincing. There's this speculative article that, perhaps, "Signs of Accumulation Emerging":
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