We have a possible weekly H&S Top pattern forming on the Nasdaq cash index. A weekly close below ~2139 will confirm it. The LS formed with left handed skewing (3 bars down: 5 bars up), which showed some weakening upside momentum. The HEAD formed around the weekly 261/261 fib extension combo combined with a 78.60 retracement level and overbought RSI. The potential RS is forming around a 50% retracement level, which is neutral. If we can get confirmation this week, then we will have right handed skewing (2 bars up: 1 bar down). This will show increasing downside momentum with a H&S target of ~1735. Plenty of obstacles lie in its path, however. First, you have the 50 and 100 DMA's. Then you have the 38.20, 50.00, and 61.80 retracement levels. Finally, you have numberous fib extensions.
In summary, we are still in an uptrend. However, if the pivot low of 2100.17 is taken out we will no longer have higher weekly highs and higher weekly lows. This will signal a trend change and a correction will take place. The new question will be how low do we go. The weeks to come will give us better clues, but the H&S top target is one early potential zone.
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