SP500 posts a nice head and shoulders pattern

The SP500 index declined on Tuesday, and it was a sharp drop from daily highs as the index cratered some 4% to post a strong daily bearish pin bar. 

On Wednesday, the price was consolidating, and the SP500 index was trading briefly higher during the London session.

What is more interesting is the fact that the price seems to be posting a very nice head and shoulders pattern, which is usually a robust bearish formation.

The neckline of this formation seems to be at around 2,635 USD, and if the price falls below this support, we could see a steeper decline. The full potential of this formation is 115 USD (or 4%). Thus bears could be targeting 2,525 USD. The more immediate target could be seen at around 2,575 USD.

Trading continues to be volatile as the fundamental situation is worsening, but central banks are printing more money each day, which is offsetting the negative economic backdrop from the coronavirus.

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