In the last few weeks, looks like the world is talking about the Head & Shoulders top in the S&P500. They argue about it... "This Head & Shoulders top is:
- A case study
- Very old school, price is going to bounce around the neckline
- To evident to achieve its target, "all" traders would try to trade it, so it won´t succeed...
- This is a bull market, price will hold the neckline, or at least 1352.5
- "To the moon Alice"
- Crash
- None of the above, won´t spend a minute with it"
The answer can make one millionaire its the consensus...
But, but... Wait... Does it? Is it really important to know the answer?
I don´t think so. All I need is an expectation, and a plan to trade it. Here it is:
Expectation
We are going down, with or without pattern, with or without you, ES_F is going to 1300
For me, this is an unquestionable dogma under and only under, 1362.5.
I can call it a bear trap if after a neckline breach, price regains 1366.75.
Plan
- Enter with a(ny) break of Friday´s low (1361.5) (adjust previous positions stops)
- Place a top loss above 1366.75
- Consider to add with a break of April lows (1352.5)
- Adjust stops to breakeven with a break of 1338.5.
- Consider to reduce @ 1318.25
- Close half @ 200 days e.m.a.
- Close balance @ 1290
Why this expectation?
First of all, one should keep in mind a wider view. I have a weekly chart turning down, which makes a bigger correction more defendable.
Back to the daily chart and to its pattern. This kind of behavior, at least from my point of view, can create frustration and I am expecting that frustration to bring out the sellers. As a reminder, AAPL numbers, FED´s day and the "NoEurope" phenomenon on May 1st, supported the last pullback from, i can call it this way, the neckline.
All these goods thrown at the markets without a real run from the price, can turn this frustation into fear and that´s what I think is going to happen if price breaks the neck.
- A case study
- Very old school, price is going to bounce around the neckline
- To evident to achieve its target, "all" traders would try to trade it, so it won´t succeed...
- This is a bull market, price will hold the neckline, or at least 1352.5
- "To the moon Alice"
- Crash
- None of the above, won´t spend a minute with it"
The answer can make one millionaire its the consensus...
But, but... Wait... Does it? Is it really important to know the answer?
I don´t think so. All I need is an expectation, and a plan to trade it. Here it is:
Expectation
We are going down, with or without pattern, with or without you, ES_F is going to 1300
For me, this is an unquestionable dogma under and only under, 1362.5.
I can call it a bear trap if after a neckline breach, price regains 1366.75.
Plan
- Enter with a(ny) break of Friday´s low (1361.5) (adjust previous positions stops)
- Place a top loss above 1366.75
- Consider to add with a break of April lows (1352.5)
- Adjust stops to breakeven with a break of 1338.5.
- Consider to reduce @ 1318.25
- Close half @ 200 days e.m.a.
- Close balance @ 1290
Why this expectation?
First of all, one should keep in mind a wider view. I have a weekly chart turning down, which makes a bigger correction more defendable.
Back to the daily chart and to its pattern. This kind of behavior, at least from my point of view, can create frustration and I am expecting that frustration to bring out the sellers. As a reminder, AAPL numbers, FED´s day and the "NoEurope" phenomenon on May 1st, supported the last pullback from, i can call it this way, the neckline.
All these goods thrown at the markets without a real run from the price, can turn this frustation into fear and that´s what I think is going to happen if price breaks the neck.
