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Chart of the Day: $SPY Bearish Patterns

Historically, these patterns have resulted in significant losses

Today we’re looking into techincals on the S&P 500’s $SPY ETF. Techincal analysis tells us that these head and shoulder patterns are bearish. Learn more about H&S patterns on investopedia.

Historically, these topping patterns have resulted in price drops around the neckline. Although these price structures are generally bearish, it’s equally important to note that past performance is not indicative of future results – or not always indicative.

We can see in the TradingView Chart above that the H&S pattern has played out in 2022 and again in 2023. We’d need to see a bullish push upward at the head of the pattern for a prolonged period of time to void the price structure – otherwise, any bearish news like a strong Jobs Report tomorrow could swing prices back down as the market reacts to the likelihood of additional rate hikes by the Federal Reserve.

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