A Breakout Would Be Just the Start

Given that I am the self-appointed queen of head-and-shoulders patterns, it will not surprise you that my inbox was filled this weekend with questions on the potential head-and-shoulders bottom in the S&P 500. Of course, in recent days I have been focusing more on the potential head-and-shoulders top in bond yields via iShares Barclays 20+ Year Treasury Bond Fund (TLT), rather than the bottom in the S&P. As we know, these tend to move in inverse fashion to one another.

First, for those of you who don't see the head-and-shoulders bottom in the S&P, see the chart below, with the annotations in red. I've left in the black line -- the lower line of the November triangle pattern -- so you can see how it has acted as resistance on this recent rally. The line is rising, meaning the resistance level is climbing with time -- and, as you can see, it should continue to act as resistance for at least a bit more time....335 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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