Adam and Eve Top with nested Head and shoulders on SPX

I have been looking at the 2020 open as a key level for a while now and in contemplation it appears that it has provided the resistance for the shoulders of a head and shoulders. Full performance would get us to this rising wedge I have also been looking at. A wider shot sees price action at the orange wedge resistance for the third time for a wedge drawn as such, using some SWAG to leave out some of the bottom of late March. while also showing a smaller, tighter, and more technical wedge shaded in yellow. It also shows the Adam and Eve Top.

The hight of that yellow wedge is the price range SPX has mostly been in since late May. I've linked Bulkowski's website on these formations for you to do the calculations on entries and exits yourself. But as it stands these peaks are about 7 weeks apart and less than 3% off from one another so they meet some very narrow technical requirements

thepatternsite.com/aedt.html

In general almost everything is prone to being tested and retested, so the wedge support could get tested as resistance, and the key level at 2970 can be retested as resistance should it fail as support. I do see this as a bull trap and so ultimately I expect to take out the March low. There always remains the chance that this wedge I see breaks to the upside, so always be prepared for that kind of action.

評論:

Here is a closer look at just the neckline and some typical EMAs providing a series of potential entries/exits or areas of consolidation as price action works its way down on the hourly chart.