A lot of analysts are talking about a Head And Shoulders to form with a sloping neckline. That is, SPX will not decline from here but rather bounce up to 1060/70 and then go down and break the 1020. While that may happen, a different scenario is for SPX to break the 1020 without forming that right shoulder, perhaps in a small rally or none at all.
I've presented those non-HS scenarios in the post called "Tuesday outlook" below, scenarios 1 and 2.
We may very well get this HS formation, we will know soon. However, I must say that there are several "wrong" things about the way the charts look, so I would not be surprised if we do not see that HS form. Certainly if we do rally, then I will again re-short that rally (as long as charts look bearish still, which I expect).
Either way, positions are in place.
* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".
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