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Head and Shoulders of the bear.

Using weekly charts and looking at the NASDAQ Composite.

Top of the head was 5/6/11 @ 2887.75
Top of left shoulder 4/30/10 @ 2535.28
Left side of Neck is: 2341.11 - 2061.14 and we were there in that are of S/R for 4 months.

We are bouncing right now in the same spot (2592 - 2459) that we bounced when we were climbing up to begin the head pattern in November of 2010.  That was four weeks worth of consolidation before the rest of the climb begin.

So, here we are again, right back to the same area during the slide down.  We are currently forming the right side of the neck.  That would mean that the slide will pick up again and continue down to around the same levels as before of 2341 - 2061.  For those traders who do Fibonnaci retracement, using the base of the neck and the top of the head, this bounce (both of them) is in between the 50 and 61.8 levels.

Short sellers and option traders are likely to be watching this pattern very closely.







Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.