S&P 500 Breaks Above Downtrend?

"The head and shoulders technical breakdown for the S&P 500 sure hasn't panned out this week. After breaking below the "neckline" for a day or two, the index has now shot up for 3 straight days and today it broke above the short-term downtrend channel that had formed since early June. Does this mean the index is headed back to its rally highs, or will this be another pump fake like the recent head and shoulders pattern? "

(Source: B.I.G.)


"Often at times when everyone has the same view of the markets and have positioned themselves in a similar manner, the market will end up doing the very opposite of what market participants expect, with this week's action in the stock market a perfect example.

The S&P 500 initially broke its neckline late last week and quickly recovered this week back up to its right shoulder, and it appears as though we are currently stuck in a trading range between 870 and 956 on the S&P 500. The question now is which will be the final outcome, a break above resistance or a break below support?

Recent action in the markets over the past two months has frustrated bulls and bears alike as the trend remains uncertain and humans loathe uncertainty. With many indicators approaching key tests and levels we may not have too long to find out what the markets direction will ultimately be."

Note: Today, ASTRO shows a reversal signal for DOW. Will it reverse down tonight? Remember this is Options Expirations Week. Be careful.