Standard & Poor’s 500 (^SPX): Weekly Bearish Gartley

It all started with this weekly Bearish Gartley just above the 1500 area (see Figure 1.1). Although the CD leg was a bit extended, the structure possessed a precise alignment of harmonic ratios to validate the pattern. The interesting aspect of the price action was the decisive downside continuation following the completion of the pattern. I outlined this setup as early as June 2000, stating in the monthly report:

“The S&P 500 has held the lows set in the past two months.... Despite this strength, there is a nice shorting opportunity at the 78.6% retracement from the high that would complete a Bearish Gartley pattern. There are three harmonic numbers just above 1500 that define the potential reversal zone: