Head and shoulders triggered stock market sell signal [Video]

Emini S&P futures

• Emini S&P break below 6665 was an important sell signal confirming the formation of a head & shoulders sell signal.
• This could trigger a 200 - 250 point loss in the days or weeks ahead.
• A high for the day yesterday at t 6588, just 2 points from strong resistance at 6690/6700.
• 1st target for shorts is the 100 day moving average at 6570 today.
• Below here tests very important support at 6450/6440.
• I will reassess the market if this level is hit.
• First resistance at 6660/6670 today & shorts need stops above 6680.
• Further gains are unlikely but we meet resistance at 6700/6710 & shorts need stops above 6720.

Nasdaq futures

• Emini Nasdaq broke the neckline to a 2 month head & shoulders pattern at around 24850 for a sell signal as predicted.
• A high for the day exactly at strong resistance at 24850/24950 with a dip to 24376 meaning the trade worked perfectly.
• The break below 24600 is another sell signal & targets an excellent buying opportunity at 24200/24000.
• Longs need stops below 23850.
• Gains are likely to be limited with a sell opportunity at 24800/24900 & shorts need stops above 25050.