Share on Facebook Share on Twitter Share on Reddit + - Chart of the day: S&P head and shoulders top By Chris Becker in Australian Sharesat 6:12 am on August 3, 2011 | 5 comments The US S&P500 fell over 2.5% last night – a harbinger of further falls. Today’s chart shows that a head and shoulders formation has been completed, with the neckline at 1250 points (the orange line) and below the 200 day moving average. If the S&P500 closes the week below the neck line, the US stock market goes from “unicorns and rainbow” bull market to a bear market. Here’s the weekly chart in context (h/t Avid Chartist who also has a good summary of the breakdown in world risk markets): Share on Facebook Share on Twitter Share on Reddit + - YOU MAY ALSO BE INTERESTED INMacro Afternoon Quite a mixed session across Asia today withAustralian dollar sinks as risk rally faltersThe Australian has been falling this morning andMacro Morning By Chris Becker The oil crisis in SaudiMacro Afternoon It's an almost risk off day here in Asia as Comments John Theodorou August 3, 2011 at 9:06 am I wouldn’t be surprised to see a test of the trend line and some wild gyrations thereabouts first, especially as the US FED has another POMO day booked for Thursday, where they will be turning up with $3 billion in handouts. But once the fertilizer is absorbed, selling will then, no doubt, recommence. there must be a genuine excuse, real panic, for another bailout programme to be enacted and the S&P at 1250 is way probably too high for this. AlanR August 3, 2011 at 11:17 am Time to buy then? John Theodorou August 3, 2011 at 11:54 am 10:15 Thursday morning NY time, POMO activity lasts till 11:00, should be good for a 100 point bounce… The Prince August 3, 2011 at 11:55 am And a good time to set up any shorts….(no I’m not short the US market yet) ASX200 is down 100 points or 2% so far today. John Theodorou August 3, 2011 at 2:29 pm And the Fed/Treasury will want you to short (i.e.no restrictions on short selling), once the signal is in (another close below 1250, perhaps after a retest of the trend line/), otherwise there will be no excuse for another bailout. Although a fat lot of good another bailout will do. But first, the blood bath – is it too audacious to suppose another test of the 2009 low at 666? Things will be plenty deflationary by then.