$SPY · StockCharts TV · 2026-11-04

The broad-based positive market allowed the Standard & Poor's index to remain relatively close to its highs, while weakness in major technology stocks prevented the index from achieving a real breakthrough.

Let's start with the Standard & Poor's 500 index and current trends. This is the pattern grid that we present to Cap Theseus clients every morning in our opening report, and it gives us a glimpse of the active patterns, both on the upside and the downside.

As we can see, both bullish patterns have been with us for a long time, i.e., 3 months, and they are under pressure. While we finally got a bearish pattern that started just last week, which we will also take a look at, it is still currently active.

Related to this, of course, is that we do n't usually see active bullish and bearish patterns at the same time. And when that happens, it tells us that we may be at a turning point.

There is a tug-of-war between the bears and the bulls in search of direction, which means either a breakout upwards or a collapse downwards. So it is clear that this makes the present time extremely important.

Let's take a look at the bullish patterns. Again, she has been with us since early August. Remember this very strong rally at the end of July and the beginning of August, which produced this cup and loop pattern.

This pattern has not really achieved any continuity since its initial stages. There is a lot of movement back and forth, especially at the moment . We'll come back to this later, but we can say that over the past few weeks, the Standard & Poor's index has fallen by 4%.

It could have fallen much further , but it's very similar to the drop we saw from August to September, just when buyers returned to the market.

The other bullish breakout was this ETF, which the index also broke through at the same time we saw it in early August. This pattern, of course, is also being challenged. So, we keep both of these patterns on our grid, even though the S&P 500 is below both breakout zones, only because it is still relatively close, teetering, but still close.

Now, as we just said, there is a bearish pattern in motion, which is the head and shoulders formation that we saw break down a couple of days ago, and which saw continuation at the beginning of November.

This results in a downside target at 7,380 . Now, in and of itself, this is not far off as far as we know , but we have not seen a successful downward pattern. We talk about this a lot.

A successful downtrend is when you not only get a break down, but the target is actually achieved. This is important because if we go back to the past few months, we have had a number of failed bearish patterns .

These are just a few examples. There is a pattern of events that occurred from August to September. We can call it the inverted cup and loop pattern. We saw a few days of decline and continuation, then a complete reversal and the pattern was cancelled.

Prior to that, and looking at the two-hour chart, this occurred from July to August. Again, this coincided with the Federal Reserve meeting at the end of July. We had a big bearish day , but it completely reversed, invalidating this formation as well.

Before that, here's another possible bearish pattern, the head and shoulders formation that formed from May to June. Once again, the price fluctuated several times, then we surged upwards again.

Before that, we can look at this pattern in a slightly different way . The double top formation also failed to achieve any continuation in the decline . Looking back at that time, what did all those failed collapses produce ?

Higher lows, which have already established this upward trend that the S&P index is still continuing in to this day. So, the bottom line is that we've seen the market attempt to collapse before, and only when things looked at their worst did buyers step in again.

Thus, we are also looking at another pattern here as defined by this trading fund. Of course, this is simply linking the peaks and troughs as accurately as possible within a box.

Therefore, I present this in relation to what has happened since the beginning of the year because it has already defined all the movement. There were some strong moves of course, especially at the beginning in April and May, but the rest of the time we were just in trading ranges.

So it's important now because we started on Tuesday, November 3, here under the latest exchange-traded fund. The last time we saw a definite breakout of the ETF was in early March when the S& P was trying to break out but couldn't.

He ended up collapsing. A V-shaped reflection. Again, we can assemble this as a box, then a breakout, then another box, then a breakout. Since June, there have been a lot of back- and-forth movements with no real net gains or losses until we got that breakout.

If you think about it, and if you look at the starting point of today's trading, between the 7500 and 7600 levels, and if we go back, we will find that the performance has remained basically stable for 6 months, that is, half the year.

There was a lot of volatile movement, and more bullish and bearish breakouts outside the S&P 500, but the rotation in sectors, as we will discuss shortly, was so perfect that it gave the index no room to move up or down, or caused a lot of erratic movement around it.