S&Ps — Chart of the day, Dec. 12, 2012
- Posted by PeterLBrandt
- on December 12th, 2012
Possible H&S top failure
Today’s Chart of the Day combines developments on the weekly and monthly graphs. Charts using different time frames often have a symbiotic relationship.
The weekly chart completed a 19-month rising wedge in early November. This was a bearish chart development and should have called for an immediate and sharp decline.
The decline on Nov. 7 completed a 13-week H&S top on the daily chart. Note that the H&S chart on the daily graph and the wedge on the weekly chart were completed simultaneously. This is normally an extremely bearish development.
The advance on Nov. 23 climbed back above the neckline on the H&S pattern and the lower boundary of the massive wedge, thus calling into question the earlier chart diagnosis. The market has remained above both chart demarcation lines. The close on Dec. 11 violated the highest close of the right shoulder of the H&S top pattern, thus completely nullifying any classical charting bearish bias.
In fact, I consider the H&S failure to be a singular pattern with its own targeting and trade risk management profiles. Pending a close below the Dec. 5 low at 1396.75 (nearby futures), the S&P chart appears to have a decisive upside bias. The target of the H&S failuure is 1498.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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Peter Brandt entered the commodity trading business in 1976 with ContiCommodity Services, a division of Continental Grain Company. From his start in the commodity industry, Peter's goal was to trade proprietary funds. But, he first needed to learn the business. More » 
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