The Dow Jones Industrial Average is currently still in an uptrend, but there is still a chance that it could soon pullback between 8800 and 9000. Next week, will be critical, in terms of where the Dow Jones will be heading in the short term. If the Dow Jones continues to go higher within its channel and hits a higher high than its previous two tops, so goes over 9600, close to 9800-10000, the uptrend will remain valid and any pullback thereafter may be short lived. However, if the Dow Jones does not hit a higher high above 9600, and starts pulling back around the same levels as the first top around 9400-9500, there is a chance that we may have a short term head & shoulders top formation. If the Dow Jones breaks its up trending channel, the formation would be confirmed in which we could then see the Dow Jones pullback to 8800-9000 levels. Please keep in mind that any formation cannot be assumed to be valid until it is confirmed. You should never act in anticipation of a break through the neckline, but rather wait for the break to occur. "Patterns with up-sloping necklines perform better. A higher left shoulder peak when compared to the right shoulder top results in a larger decline post breakout." (source:www.thepaternsite.com/hst.html). You should never act in anticipation of a break through the neckline, but rather wait for the break to occur.
For more information about head & shoulders formations, you can visit this link: http://thepatternsite.com/hst.html
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