Much like the mountains of Afghanistan, which historically have been impossible for invaders to conquer, the twin peaks on the monthly chart of the S&P 500 Index dating back to 2000 and 2007 have been met with fierce resistance. Specifically, I am referring to the area above 1550, up through all-time highs at 1576.
For our purposes, though, the updated 30-minute SPY chart below has served us well in the face of looming overhead levels. Indeed, the inverse head and shoulders bullish formation we discussed last Friday and yesterday, triggered today. Holding above the 1525 neckline into the close, and not too seeing too much giveback into tomorrow is the next logical frame of reference.
The pattern measures a move up to 1565 on the S&P 500 Index. Some consolidation in the short-term is not unusual. But bulls really do want to avoid too much of a retracement, just yet…
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