Stormy Monday

The main pattern I'm watching this morning is of course the H&S that formed on SPX last week. I called it as a possibility on Wednesday morning, and the H&S completed forming at the low on Friday. With SPX currently over 20 handles down from the close on Friday this could be a breakaway gap through support, in which case the key resistance levels to watch this morning are the retest of the H&S neckline at 1872, and the opening gap from Friday's close at 1880.05 should not be filled. SPX 15min chart:

I now have a decent looking falling channel from 2081 on SPX and I'm looking for at least a retest of the 1812 low next, and likely lower. SPX daily chart:

The main downside target here is rising support from the March 2009 low in the 1760 area, and that is a possible significant low area from which a new all time high could be made. A break below that trendline opens up the possible 1600 retest target that I've mentioned regularly. I'll be watching that carefully. SPX weekly chart:

I'm expecting to see a retest of the 1812 low this week and as today is a cycle trend day, with 70% odds of being dominated either buy buyers or sellers, we could potentially see that test today or tomorrow. Unless SPX heads straight down from the open I'm looking for an AM high that fails today and then more downside.