The S&P 500 has the potential to create a bearish head and shoulders pattern sometime in the near future. This pattern remains valid as long the SPX does not close above the double top at 1370. Once the right shoulder forms, I will take this trade on a close below the black neckline which right now is just above 1260.
Please note that as of right now this is just a potential pattern; it's not a head and shoulders yet. I've heard a lot of chatter online suggesting that this pattern is already in play--it isn't. This short is in play only on a close below the black neckline and not before. It will also cease to be even a potential pattern if it should close above the double top. In this event the chart may still remain bearish, just not a head and shoulders pattern.
This pattern will not be actionable for a while--likely a week or more--but I will be watching it closely and provide any updates here and on twitter as I see them.