In the series Star Trek, when the Enterprise was threatened, Captain Kirk would call Scotty and request “more power” to escape a dangerous situation.
The 500 index is in a situation that a little more “power to the upside” could take it away from a situation that has historically been a dangerous one.
The patterns in the chart reflect a rising wedge at the Fibonacci 50% retracement level, with a right shoulder still in play. The patterns suggest a defensive posture or possibly to score on defense, until this series of resistance can be taken out.
Can Scotty come through? Stay tuned for this all-important future episode.
About that head & shoulders: I frequently receive emails asking if the pattern is still in play. Roughly a month ago I put together a 10-year chart illustrating multiple head & shoulders formations. At that time the 500 index was pressing on the neckline of the current pattern. A month later, the 500 index has rallied off the neckline, back up to resistance at the right shoulder, forming a trading range.
The 10-year chart illustrates how significant the moves around the typical H&S pattern can be.
There is a high probability that, three-months from now, we will look back on the August 9th open from a very different price level.
For feedback or more information, email Chris at KimbleChartingSolutions@gmail.com.