S&P 500: Head-and-Shoulders Top

•A key assumption is that the right shoulder is not exceeded. Nonetheless, this seems unlikely given the likelihood of negative fundamental events relating to the economy and earnings .
•Much like the Nikkei 225 crash of 1989, the 100 MA's could end up stopping the bounce dead in its tracks. Hence, it's very possible that consolidation will continue in the 2700-2800 range for some time.
•Shoulder levels are not just arbitrary: 50% Fibonacci Retracement mirrors several prior crashes, including the Nikkei 225 in 1989, the S&P 500 in 2008, and the Dow Jones in 1930.


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