Well first off I hope everyone had a great holiday! Here is a daily chart of the S + P 500 (SPX) for the last 8 months. I think this is good for us to see as we discussed the short term picture with our head and shoulders topping pattern, well now lets take a look at what we can expect over an intermediate time level as we look at a bigger picture. Now I post this as a warning for those already invested, because with the VIX hitting long term support and a possible breakdown of a topping price pattern. We could very well see some volatility and selling pressure over the coming month(s). We can already see the tone change in the news with the jobs number that came out and talk of another stimulus (please don't get me started!)
Now as we look at this chart we see what is called an inverted head and shoulders pattern, the circled area is the smaller move we have been focusing on but the bigger picture is what you see here. I do however apologize the chart is a little messy I didn't have much time to put it together, but you should be able to get the picture. I believe we should sell off and come back down to form that right shoulder over the coming months at first glance I would say the 740 area could be the target. Now if we can hold there and push back higher this sell off which we are now experiencing is not a bad thing for it will give us enough momentum to break the neckline (horizontal line) around the 950 area and push much higher.
However if we cannot hold that 740 area we could be retesting the March lows, and if that doesn't hold then who knows where we will end up? However at this moment I don't think this will happen, unless God forbid something catastrophic happens I believe the low of this Bear market is in place. That is just my personal opinion though as many way more skilled analysts do believe that we will see lower prices. At this point though it is purely speculation and as you know I do not like to get into speculating. Hope this gives a little clearer picture of what the market may have in store for the near future.