S&P 500
The impressive rally in equities of the past 4 weeks will have tested the resolution of any bears. Certainly it's had me reviewing the charts for signs the minimum head and shoulders count from the August top was all we are going to get on the downside. The rally has certainly gone further and happened more quickly than I expected.
But the S&P 500 chart still shows the neckline being only just surpassed and this is totally acceptable. The same thing happened at the 2007 top and the no-one will forget what happened next as financial meltdown was only just avoided. The two patterns are eerily similar. A case could also be made for this latest rally forming the right shoulder of a much larger H&S.
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