A short-term head-and-shoulders pattern is starting to look like it could have long-term and ominous significance for the stock market. SPY Turned Back by a Gap In last week’s Market Outlook, I highlighted a head-and-shoulders top that had formed in SPDR S&P 500 (NYSE: SPY). The price target for that pattern had been achieved and SPY was moving toward resistance defined by a gap. The gap is… Read More
A short-term head-and-shoulders pattern is starting to look like it could have long-term and ominous significance for the stock market. SPY Turned Back by a Gap In last week’s Market Outlook, I highlighted a head-and-shoulders top that had formed in SPDR S&P 500 (NYSE: SPY). The price target for that pattern had been achieved and SPY was moving toward resistance defined by a gap. The gap is at the neckline of the head-and-shoulders, giving it additional significance. That chart has been updated to include the most recent price action. After meeting resistance, SPY fell and ended the week down 1.78%. Small-cap stocks fared worse with iShares Russell 2000 (NYSE: IWM) falling 2.7%. Small caps often lead the market at turning points. Both indexes are more than 4% below their all-time highs reached in the first week of August.#-ad_banner-# This is still a rather shallow pullback, but… Read More