The market made all time highs on Monday June 9th, 2014. Early on Tuesday morning, S&P 500 futures are treading water – below 3 points. They have been underwater since yesterday’s close. Now, they seem to be making a quite turnaround.
Overnight, Asian markets rose to three-year highs. Shanghai rose by +1.1%, Hong Kong by +0.9%, Seoul by +1.1%, Sydney by +0.1%, Mumbai was unchanged and Tokyo lost -0.9%.
To top it, once European markets opened early US morning, futures made a short-term low which looks like a head of an inverse head-&-should pattern – see point H in the 15-minute chart. The head also coincides with a TCLOS (Trend Channel Line Overshoot) pattern mentioned by Al Brooks’. The downward trend line is also broken and re-tested. Once the neckline is broken convincingly then the inverse head-&-should pattern will be complete. If the price dips below the Right-Shoulder then the pattern will be nullified. The upper target is 1950.25 with good potential for a test of the high of 1953.50.
Update: The neck-line was briefly broken at 7:00 AM but the candle did not close above it rather it was bearish engulfing. The 7:15 AM candle closed below the ‘Right-Shoulder’. The pattern never completed and was nullified.