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A “battle of forces” continues in the broad based SP 500
Since the 2011 lows, the S&P 500 has created a series of higher lows, along line (2).
Since July of this year, the S&P 500 has created a series of lower highs along line (1).
This combo looks to have created a pennant pattern, which is nearing completion (lower right inset box).
As Yoda shares with Luke above, investors best follow the “Force” of this pattern, as a breakout or breakdown looks to “have” to take place soon!
Pennant patterns suggest that when a breakout/breakdown takes place, the move should be big. The S&P has been trapped in the pattern for months, so we suspect that when this pattern is resolved, it should have a big move!