The SPDR S&P 500 (ARCA:SPY) has an inverse head and shoulders on its chart with a right shoulder that started lower than it should have (navy blue neckline). Plus, it now has a mini head and shoulders on its chart (silver neckline).
This confusion is happening across the critical SPY 196 area.
Typically what happens in these situations is that the price continues moving sideways, putting false breakouts on both the inverse head and shoulders and mini head and shoulders and eating stops in both directions. But if you see a decisive breakout in either direction, you play it.
A genuine downward breakout would mean a breakout through the bottom of SPY’s 2-year+ rising wedge, which will be at a little below 195ish today. A genuine upward breakout would mean a breakout past ES 1980ish/SPY 198.50ish. If SPY continues moving sideways, we’ll likely have a tighter entry.
A breakout upwards would target a new all-time high. A breakout downwards would target roughly 1850.
SPY had only one day of weakness in this area on the move up out of the August 7th low.