Chart of the Day - Tuesday, February 22nd, 2022

Today’s Chart of the Day was shared by Michael Kahn (@mnkahn). The S&P 500 has formed a textbook head & shoulders top over the past six months. According to the textbook, this bearish pattern would signal ~10% further downside if we break neckline support around 4300. The problem is that this pattern has become glaringly obvious at this point. We're all watching the same movie here. To quote Joe Granville, “If it's obvious, it's obviously wrong.” That being said, 4300 remains an important support level for the S&P 500. A close below that level would open the door for further downside risk. One thing is for sure - if this head & shoulders top does end up playing out according to the textbook, it will be one of the more anticipated technical tops that we've seen in recent history.