Head & Shoulders Pattern On $SPY: Read This Before You Trade It!

The S&P 500 is holding just slightly negative on the day, as volume is insanely light. Why negative? Oil prices are sharply lower, taking some steam out of the recent bull raid on Wall Street.

 

CHART ALERT: The S&P tracking ETF the $SPY, has a nice pattern formation known as a Head & Shoulders on the intra-day chart. Note the chart below. This pattern is a bearish pattern. But before you jump the gun and enter this trade, note the light volume. Like many traders will say, “never short a dull market.” While this pattern may be great, as a smart trader you always need to take into account multiple factors, and this is one we are going to have to watch…

 

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Gareth Soloway

Chief Market Strategist
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