We’re hearing much talk about the potential Bear Flag pattern on the S&P 500 Daily Chart.
Let’s take a mid-week update on the pattern and note the current key price boundary levels to watch for clues.
First, here’s the S&P 500 Daily Chart trend-lines structure:
Moving from right to left, we see the current “Bear Flag” consolidation pattern stretching from early June to present.
The lower rising trendline resides near 1,340 while the upper rising trendline continues near 1,390. The 30-min chart below emphasizes these trendline levels.
Now, moving to the left of the chart, the last time we saw a similar Daily Chart ‘flag’ struture was from August to October 2011.
While price did break the downside trendline, the full downside target was NOT achieved due to a power-rally which developed off the 1,100 Index level.
From there, price structure continued to trade mostly in a “Creeper” uptrend, bound by the prior “flag” trendlines until the breakdown of May 2012.