The S&P 500 -- wackiness in 2015 notwithstanding -- has a very bullish pattern emerging for traders to possibly look forward to.
But it's gotta confirm.
And if it does? We'll have the potential for a very promising start to 2016 as the pattern plays itself out.
That pattern is an inverse head and shoulders that you can see in the chart:
As you can see, the pattern is obvious; but not so discussed. Instead, the focus is on terrorism, China and, of course, whether the Fed will raise rates in December. So this pattern may catch a lot of traders by surprise -- especially those short the market.
The key will be for (N:SPY) to hold the $202.18 lows established earlier this month. If that price level is breached, the pattern will be nullified and no longer worth following. Anything above it though and the pattern remains in full effect.
When determining a target for such a move on SPY, one could surmise that a confirmed breakout could lead to a $20 rally -- AKA a 10% move on $SPX. That would, no doubt, be mighty impressive.
But for now, let's see whether the pattern can confirm.
If so, we'll talk about price targets later.