S&P 500 / US500 has broken below key support and Neckline in the Shoulder-Head- Shoulder like pattern at around 4,328. RSI is below the 40 threshold adding to the bearish outlook.
Note: Ideally the two Shoulders in A Shoulder-Head-Shoulder pattern (which is an indication of a top and reversal) should be almost equal height and same distance from the Head. In this case they are neither. However, that doesn’t mean S&P 500 will not act as if there is an SHS pattern which is why I have indicated it on the chart.
The two vertical arrows are indicating the potential distance S&P 500/US500 can move after is has broken below the Neckline.
If S&P 500 does travel the indicated distance there is potential down to 4,050. However, often the distance is cut short to around the 0.618 Fibonacci level at around 4,155 which is very close to the 200 Moving Average and the upper range of the Consolidation area
The 200 daily Moving Average currently just above the 0.618 Fibo level will add some support.
To demolish the SHS pattern a close above 4,540 is needed.