Generally: the S&P 500 may be forming a 10 to 12 month head and shoulders top, but with 1040
holding last week, the case for a mini head and shoulders bottom off the 1040-
1010 area remains intact as well. While an oversold rally is probable, it would
take a break above the 1130-1150 resistance to confirm the bottom pattern and
negate the top pattern. Until then, the risk is for a deeper correction. A break
below the July 2 low of 1010 would increase this risk and favor a decline into
1000-950. The next support is the 61.8% retracement of the March 2009 to 878
if Long-term bond bottom, it will be bullish for equity.
