Yesterday I showed you what looked to me to be an Inverse H&S bottom forming. Last night I mentioned that tops and bottoms are processes, not events, consistent with this pattern. Today's gap down and yesterday's late day sell-off helped to form the right shoulder of the pattern.
Don't forget yesterday's hourly Bollinger Band chart of the SPY, showing the bands pinching, indicating a highly directional move may be very close at hand. Coincidentally, the inverse H&S is also near completion.
The 1 min chart was not only positive on last night's HFT induced sell-off, but on this morning's gap down.
The 15 min chart was also positive at both areas and is now in a leading positive divergence-the most powerful kind.
The 30 min chart has also been very constructive during the Inverse H&S pattern, currently also leading and positive at both yesterday's closing lows and this morning's gap down.
Even more impressive is the hourly chart during this consolidation.
Being an easily recognizable pattern, we'll have to be on the lookout for any head fakes.
There's a short term 1 min negative divergence, so look for the a pullback, which has already started during the course of my putting this post together.
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