B + ((NL-HL) * 74%) 957.23 + ((956.23-666.79) * 74%) This calculation is for measuring a target price for an upward breakout of a head and shoulders bottom. The calculation comes out to be 1,171.42 for the estimated target price after puncturing the neckline July 23, 2009 in the S & P 500. This indicates there should be a secondary move coming soon. In other words, there should be a correction coming that I would estimate would be only a 10% retracement. The highest bar for the S & P 500 was 1,163.23 before declining 9.7% after breaking through the neckline of a head and shoulders in 2003. The highest bar is 1,150.41 for this year thus far.
I have the S & P illustrated below. It may soon exhibit a 1-2-3 trend reversal on the weekly chart. Now that the trendline has broken, it should now recycle back. Afterwards, the market should continue moving higher allowing for #3 in the 1-2-3 trend reversal. This would be a reversal in that the trendline from the prior peak of 2007 and the peak of May had remained intact and now the primary trend is shifting. If the S & P recycles back to its trendline on the weekly chart, this would result in a 9.5% correction.
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