Tuesday, 17 May 2011

S&P 500 monthly and hourly

The possible monthly chart head and shoulders formation (h & s), first suggested on April 29, is looking a little less far fetched after the weakness so far in May. A move below the April lows at 1294 would increase the odds for the h & s, while a break upwards through the May highs and especially 1400 would rule it out.

Zooming in to the hourly chart of the action in May, we see three parallel down trend lines that have been useful guides to determining probable price action. Another bounce downwards from the rightmost line, or from near the rightmost line, would be be a useful trading edge, if it eventuates.