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Head and Shoulder formations on the indicies.

Interim Head & Shoulders Forming???:  A look at bar charts for the SPY (daily, 2-day, 3-day) all show a POSSIBLE (not inevitable) Head and Shoulders formation forming.  The right shoulder has not yet started to form, but there is a good left shoulder and head pattern with a strong neckline (ca $103) already in place.

IF A RIGHT SHOULDER FORMS followed by a threat of the $103 neckline in the near future (about another quarter worth of price activity), THEN by the end of the summer we will have a good idea of whether or not this market is planning to retrace significantly into the last year’s worth of price bounce.  If this does form a topping H&S, then the projection for the retracement will be ca $85.  That would be the range of Q2 2009 (ca $92/$82). 

IF A RIGHT SHOULDER FAILS TO FORM then the market will build whatever base it needs to move forward into a new leg up.  It will be interesting to watch the unfolding of The Drama Of The Bulls and Bears.

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