Pull Back (by George Rahal)

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Prices have halted their advance over the last few trading days, with many indexes near their February highs, and some above. The latter (first two charts below) actually give a clearer visual clue as to why to expect a pull back. The third chart has a zone of where my analysis suggests a pull back would end on the S&P 500; either at a slightly higher high from the most recent 15 point reaction, or back to the 1300s for prices to form an inverse H&S. However, I would not sell (short) because there is a possibility of an upside breakout.

All charts are in 30 min bars.

Blog 4.7.11
Blog2 4.7.11

Blog3 4.7.11