SPX: Double Inverse H&S

The SPX formed a little Inverse H&S (pattern in yellow) with a neckline at 711.67 and 711.23, then the SPX completed and broke out of the larger Inverse H&S (pattern in white). It has a slightly upsloping neckline, at 713 and 714. When the larger Inverse H&S broke out, that sparked the afternoon rally into the mid-720's.

The breakouts put targets of SPX 730 and 734 IN PLAY. As we've often discussed during the Bear Market, targets that are against the dominant trend are less likely to get MADE than if they are in the same direction as the trend. Much of that depends on the strength of the pattern. This one formed at new lows in the SPX and formed over a very short period of time, so it's a weak pattern, even though it's a DOUBLE Inverse H&S pattern. Yesterday's CLOSE back below the neckline also is highly suspect, and it also puts the targets ON HOLD unless/until the SPX rallies above the neckline again.

The horizontal red lines are the lows of the Right Shoulders, 705 and 700. They "shouldn't" get taken out to the downside. If SPX 705 gets taken down, I would view the patterns as invalid.