Technicals: The Bearish Case For The S&P 500 & Energy Complex

 
FMX | Connect (Reported 7/6/10) 













Below are four charts that represent the S&P 500, and energy complex futures ( gasoline, crude, & heating oil). These charts were brought to our attention after we noticed a common bearish technical pattern among all of them – the infamous head and shoulders formation. Chart 1 illustrates the S&P 5000 futures. The pattern is clear and defined, and as of this writing, the market appears to be re-testing the neckline. The remaining charts illustrate the energy complex, but here the necklines have not been penetrated.  Given the technical patterns, we think there’s a strong probability that the equities market are hinting at a significant soon to come selloff across the energy complex.

 Chart 1: Front month E-min S&P Futures

 Chart 2: Front month unleaded gasoline futures

Chart 3: Front month crude oil futures

Chart 4: Front month heating oil futures