EOD: A small turn signal down in volatility implies that the market will move up from here which then complies with the summation index which has been moving up so it may simply confirm a continuation to a retrace high somewhere above in the markets. Volatility derivatives are already at extremes so this does not indicate a directional change in volatility futures just more in the same direction until a low in volatility is printed as the summation index ascends and potentially rolls over inside the right shoulder.
1:41pm EST: A turn signal down in volatility [market up] is trying to print intra-day so the closing numbers will be important. Note these small turn signals in volatility are happening very rapidly but the summation index is printing a move up and has been for a while which implies it is looking for a top. When it does roll over the turn signals become valid as far as support from that indicator. That likely will occur when a retrace up is completing. Anything other than that will become apparent.
Original post-
After careful analysis, there appears to be a Head-And-Shoulders formation that has merit given the current market set up. These formations are typically unreliable at only 67% chance of completing however, it needs to be considered as demonstrated in the chart for the SP-500. There are potentially three necklines with the smallest likely near or having completed. If the retrace currently shown in brown materializes and does not take out the small neckline [thin blue line] it could be headed for lower targets. Another turn signal up in volatility [market decline] will be needed if that is to happen somewhere in the retrace. Volatility currently appears to be trying to find a bottom which would be expected at this juncture inside a possible right shoulder pattern.
Charts are daily on the left and weekly on the right hand side. Lower chart demonstrates the potential across multiple instruments in the general market. This set up could cause quite a stir but may not be a terminal top yet. Negativity in the blog sphere does not support a terminal top just yet though there was exuberance in the preceding weeks around the potential 'head' so watching closely for signals and developing patterns. SP-500 pivot drops between 9 to 12% have happened since 2000 at major topping zones prior to the actual terminal tops in a few high degree price tops so the proposed move would not be out of place as described.
The bots will flag here when they see a top. (1/25/20, 2/20/20)
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