Head and Shoulders...

As I mentioned last week in this post and to paid subscribers, it is extremely dangerous should the SP-500 turn around on the 30MA after a dragontail formation and thats exactly what it did. Such a behavior formed a strong head and shoulders formation with left shoulder on 27 April and head on 21 May. Such a formation usually spell trouble... sometimes trouble as big as October 2014 when the SP-500's dragon tail formation failed at the 30MA almost exactly how it is this time round. In fact, with the market so overdue an intermediate correction and economic indicators continuing to fail expectations, this could be an excellent position for the market to just go into that long awaited intermediate correction so as to set up better entry points for that final bull leg. Adding possibility to this scenario is one of the most volatile weeks of the month coming up ahead... the FOMC announcement, leading indicators and Quadruple witching, all of which will no doubt add uncertainty and volatility to this already shaken market.

For now, the US market remains in short term neutral trend within an intermediate and primary bull trend.