The high-level base, taking on the shape of an inverse H&S formation, is still setting up as it stands right now. But before it can come into play there needs to be an official trigger of the pattern by closing above the neckline and beyond the 2282 high set on Jan 6.
The market is currently trading outside the trend-line rising up off the November low, but given it didn’t break it and decline is encouraging. What would discourage the bulls’ case is a decline below the Jan 12 low at 2254 and Dec 14 low at 2248. At that juncture, the market would be well below the top-side trend-line extending over the 2007 and 2015 peaks. The S&P has responded twice off this line, so while it’s long-term in nature, it is mattering right now. A hard break below support would take the H&S scenario off the table, too.
