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Will $SPY Create An Inverted Head and Shoulders Pattern?

The recent pause in rate hikes by the Federal Reserve has sent shockwaves through the financial markets, with the dollar falling, the 10-year yield retreating, and stocks surging.

inverted head & shoulders $SPY

This unexpected move has left many investors wondering whether this is a temporary respite or a sign of a broader market shift.

One potential outcome is that the market could turn down, potentially forming a right shoulder and reaching the penultimate stage of an inverted head and shoulders pattern whilst filling the gaps from the way up. This pattern, characterized by a large head followed by two smaller shoulders, is often seen as a bullish reversal signal (keep in mind it hasn't happened yet).

Additionally, the upcoming months of November and December are typically bullish periods for the market, which could further fuel the upward momentum.

As we navigate this uncertain landscape, it's essential to remain cautious and vigilant. While the recent market movements may seem promising, it's important to remember that stock prices can fluctuate rapidly and unexpectedly.

Technical Analysis

If $SPY breaks $434 we could see the first gap fill to $430.90 as seen in the gap with the red dot. If we break the EMA's at that level you can expect the second gap to be filled (blue dot) to the $423's. This would complete the inverted head & shoulders 2nd to last stage. The final stage with be the breakout which could happen in late November or early December based off technical analysis and history.

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