Potentially Big Head-and-Shoulders Bottom in S&P 500

Bullish Patterns in Nasdaq and S&P
By Mike Paulenoff, MPTrader.com

The Nasdaq 100, as represented by its QQQQ index tracking stock, has been pushed up against key near-term resistance at 36.40, which has been hurdled but needs to be sustained. A sustained hurdle of that level should trigger upside acceleration towards a test of much more important support at 36.80/85.

A hurdle also triggers the potential of a July Double Bottom formation at 35.54 and 35.62, which projects to 37.50/60 and possibly as high as 38.

At this juncture, only a failure to hurdle 36.40 followed by a reversal and plunge beneath 35.50 will wreck the developing base-like pattern.

Moving over to the S&P 500, the overall pattern displayed on the point and figure chart shows a potentially big double bottom formation at 1220-1226, which must hurdle 1280 to trigger upside confirmation that projects to an optimal target of 1320 thereafter.

However, from a near-term perspective, the SPX must claw its way above key resistance at 1262 and 1274 to have a realistic chance to trigger the larger double-bottom pattern.

For the time being my work argues for a hurdle of 1262, at which point we will re-evaluate the upside potential.

Mike Paulenoff is author of the MPTrader.com ETF Trading Diary (www.mptrader.com), a real-time diary of his technical analysis on equity markets, futures, metals, currencies and Treasuries.

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