Even EWI has posted on the SPX forming a head and shoulders chart pattern. The DOW would be a big bearish H&S also. The Nasdaq doesn't quite fit so well.
If the H&S pattern formed (good chance it will) the contrarian stance would be to play the long side. The H&S downside target would likely be in the 820's somewhere. 821 would be a 1.618 Fib expansion target of the zigzag from 956 to 888.
I have already stated that if P2 is not yet peaked, then it would likely require another zigzag up in a triple zigzag pattern. I have also stated that it doesn't make much sense for a third zigzag to start beneath where the second one started as would be the case if a H&S pattern played out and its downside target were met.
So therefore I don't like the H&S. Its too obvious. Once a pattern becomes so obvious, so early, by the time it is ready to "break" and follow through, everyone has already taken positions long prior to the "break" point. So therefore instead of following through on the pattern, it does the opposite because everyone was already positioned for the move well ahead of time. That's one theory anyway on why chart patterns sometimes fail miserably.
Bearishness is already getting lower on the $SPXBP chart (again assuming 956 is not P2 peak).
What is instructive though is if the market is tracing a Y wave, it could hold above the H&S neckline (or a false break under that recovers) by tracing a triangle or a flat pattern for the Blue Y wave. So indeed I'll be watching closely.
In conclusion, if P2 topped at 956, then a move down to 821 will eventually have to occur, that much I admit and am ready for. But I suppose if P2 is not topped. I lean toward a new high this summer based on what appears to be a zigzag down from 956 to 888 and subsequent X wave back up. Also I pay EWI a lot of money for their services and they say P2 likely has one more rally this summer based on their expert sentiment readings ans experience) so I blame them LOL! So then the 820 range, in my estimation, would have to wait a while longer.
But one subwave at a time. Again, I am way ahead of myself and if the market wants to bust lower through 875, who am I to say that shouldn't have happened?