The Head & Shoulders neckline has been broken. We should see the SPX continue its course to or below the H&S minimum target of 1694.92. This will not only give the initial break of the Orthodox Broadening Top but also break the massive Ending Diagonal. These declines are taking the form of a Leading Diagonal, which is comprised of 3-wave moves instead of 5 wave moves. This may still considered impulsive in the fact that ultimately they will form a 5-wave decline. In the meantime, it has analysts flummoxed, since they see the a-b-c decline and consider it corrective instead of impulsive.

VIX has also broken its Inverted Head & Shoulders neckline. Passing the Ending Diagonal trendline may also set up for a much larger move higher.

Regards,

Tony

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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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