Update on ‘megaphone’ pattern

As the S&P 500 crosses the key 3000 resistance level we want to remind  investors of how in our the April 28th issue of Trend Letter we alerted subscribers to the ‘megaphone’ or ‘broadening’ pattern that was forming with the S&P 500. Megaphone patterns show the potential for both higher highs and lower lows. Here is an updated version of that chart…

What we need to watch for here is the potential for a near-term top at new highs around 3000-3040 for the S&P 500 very near term. A break down from that level could result in a significant correction testing the lower level of the megaphone pattern.  If we see a break above 3040 then this rally should continue higher.

Stay tuned!