They say if you stare at the clouds long enough you can see any pattern you want to see. So is it with stock charts.  To profit, however, it is essential that others see what you’re seeing. So we ask, GMM readers, in the context of today’s terrible trading action:  Do you see what we see?

Today’s S&P500 candlestick hammered out a gravestone doji and the potential formation of the right shoulder of a short-term head and shoulders top.  We also note Apple was up over $11 to an intraday high of 422.86, only to give back most of the gain into the close.

This makes yesterday’s low on the S&P of 1188.36 a very important level of support.  Next would be the 1135-40 area.  We recognize that an unexpected monetary blast from the Marriner S. Eccles Building tomorrow come send the index up, taking out the right shoulder at 1220 and recapturing the 50-day moving average.  A low probability, in our opinion, but one, which the jet set is not positioned for.   Flat to slightly short is how we’re playing Risk for Fed Day.

You know, they also say if your stare at the clouds long enough, they tend to evaporate!

(click here if chart is not observable)