As I expected the SPX has been moving sideways now for a few days. A failed attempt at breaking above NL? was made near Friday's close.
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The obvious question I have is whether the drop on 4/21/09 was sufficient to form a right shoulder (RS?) in a forming Head-and-shoulders Bottom (HSB) pattern. Looking at the chart above, I'd have to opine, yes. RS? looks similar to LS? only a little smaller. Edwards and Magee are clear in stating that right shoulder formation is often abbreviated and that fact does not diminish the power of the pattern. So in my opinion, all we now need is a break above NL? to confirm the HSB. The standard measuring implications of a HSB is a move up equal the height of the pattern. That would take the SPX up 210 points above NL? to around 1085.
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I'm still hoping to enter long at ST-S1 which doesn't look likely today but you never know. I will go long today with capital not managed by mechanical methods, if the SPX is below 835 at my fund cutoff time.
