SPX, NASDAQ & MS Targets

The SPX broke the Symmetrical Triangle on a gap down opening, leaving a gap on the chart at the bottom of the pattern from 818-824. That's key resistance on any gap-filling rally to retest the breakdown.

Math for the downside target:

877.86 - High of the pattern
804.30 - Low of the pattern

877.86 - 804.30 = 73.56 points of downside from where the lower trendline was when the breakdown occurred. (824.20)

824.20 - 73.56 = Target 750.64 IN PLAY

The targets are at the top of the chart. The first two are the lows at Purple #3 and Purple #1. The third target is the measured move (like we just did for the SPX) from the point of the breakdown. This pattern could morph into a H&S Top right near here. The neckline would be the low of Purple #3 and whatever low we make right here. We'll look at an example of how that would look in the last chart below.


The H&S Top (Hourly Chart)/Bear Flag in the daily chart broke to the downside at 22.31. Targets are the low of the pattern and the measured move off the breakdown, calculated the same way that we did in the SPX chart above.

It's fairly commmon for Bearish Rising Wedges/Bear Flags to "morph" (change) into a H&S Top. If that's going to be the case, we'll put in a low somewhere near the 19.28 low of the Bear Flag, rally for a Right Shoulder, preferably on low volume, then break the neckline, per the arrows.