On Wednesday, the S&P tagged my 1525ish projection off the break of the 1550 neckline based on an hourly S&P Head & Shoulders Pattern.
The S&P shows five hourly waves down to 1525 / 1526. This suggests an impulsive downside action. Will the index reverse lower after a 1-2-3 hourly bounce?
Off 50 points from the 1576 square and down five of the last six sessions, the index bounced back from the red on Wednesday after the release of the Fed’s Beige Book showed the economy is decelerating. So, of course, let’s buy stocks. Why? Because, our friend Ben is in his turret. Wednesday’s late recovery saw the index recapture 1536 marginally, which as you recall is ninety degrees down from the 1576 high.
However, unless the 1550 level, which is 50% of the recent swing, is recaptured any rally attempt on the S&P is suspect – despite the dance of the momentum dragons.
Legs.mp3.http://www.fugly.com/staph/otis/ZZTop_Legs.mp3
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