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South Korean authorities investigating President Yoon Suk Yeol have arrived at his official residence in a second attempt to detain the embattled leader for questioning over his short-lived declaration of martial law last month, according to South Korea’s Yonhap news agency.

Vehicles from the Corruption Investigation Office (CIO), which is working with police and the defense ministry to investigate Yoon, were seen arriving at the property early Wednesday, according to Yonhap. Members of the police appeared to be part of the arrest team.

Meanwhile, video from Reuters also showed groups of protesters crowding the main gate of the residence. A white van marked “POLICE” with flashing blue lights was also seen approaching the entrance flanked by uniformed officers.

Despite sub-zero conditions, demonstrators could be heard chanting “resign,” “your time is up” and “take responsibility.”

The crowds were accompanied by lines of uniformed police, and a combination of police buses and protester buses remained outside the residence, blockading the street.

Video from YTN showed a large sign on the back of one bus that read “Yoon Suk Yeol, Step Down” and “Insurrection Department – Yoon Suk Yeol” in Korean. Both slogans are typical for anti-Yoon protests since the president launched his abortive attempt at declaring martial law.

For weeks, the embattled president has been holed up in his fortified residence, surrounded by his Presidential Security Service team, evading arrest as he faces several probes and an impeachment trial following his short-lived decree.

Yoon is wanted for questioning in multiple investigations, including over accusations of leading an insurrection – a crime punishable by life imprisonment or even the death penalty.

Efforts to take him into custody earlier this month were thwarted after an hours-long showdown in which soldiers and members of the presidential security detail blocked some 80 police and investigators from approaching the presidential compound.

Martial law declaration

Yoon declared martial law in a surprise late-night address on December 3, claiming opposition lawmakers had “paralyzed state affairs” and that the move was necessary to “safeguard a liberal South Korea” from the threats posed by “anti-state elements.”

Members of the National Assembly, including some from Yoon’s own party, voted to reverse the declaration some six hours later. Yoon’s order faced fierce backlash from the public and lawmakers across the political spectrum, reviving painful memories of the country’s authoritarian past.

In the weeks since, the country has been in political disarray with parliament also voting to impeach its prime minister and acting president Han Duck-soo, just weeks after it voted to impeach Yoon. The finance minister Choi Sang-mok is now acting president.

This is a developing story and will be updated.

This post appeared first on cnn.com

The South African government has launched a rescue operation at an abandoned gold mine in the country’s North West province, where at least 109 men have died, a group representing the miners said, after local authorities cut off vital supplies in a dramatic bid to crack down on the country’s illegal mining trade.

As of Tuesday evening, at least 51 bodies and 66 survivors had been pulled out of the Stilfontein mine, according to South African police, with many more feared trapped inside.

While estimates varied on how many men were in the mine, Meshack Mbangula, head of the Mining Affected Communities United in Action (MACUA), had earlier estimated that 500 people were trapped underground.

The video, filmed by one of the miners last week, according to Mbangula, also shows shirtless, emaciated-looking men with protruding bones and ribs.

A man speaking in Zulu, pleads to be rescued in one scene. Another man says: “How many days must we live in a situation like this.”

“Please take us out. Please assist us to come out or if not, please give us food because [there are] people who are dead. We’ve got 109 people dead and we need plastic to wrap them because the smell is too much, we can’t stand the smell,” the miners said in the letter.

Community-led groups like MACUA say they have led the effort to help the trapped miners for months, he said, as police cut off food and vital supplies to the men in November in an attempt to force them out and close the mine.

The police’s move – a self-described crackdown on the illegal mining industry – has drawn criticism from community groups and South Africa’s Federation of Trade Unions (SAFTU), who in November called it “vindictive,” and one that may “end in a tragedy.”

Police spokesperson Athlenda Mathe told reporters in November that food and water supplies to those underground had been halted. “We are stopping and preventing food and water to go down there as a way of forcing these illegal miners to resurface because what they are doing is criminality,” she said.

Miners would face arrest upon resurfacing, according to police.

In November, a South African court ordered police to halt its standoff, provide food to the trapped miners and allow rescue teams to access the mine. The nation’s Human Rights Commission (SAHRC) also said it was investigating the police service for halting vital supplies to the miners.

On Sunday, facing intensifying public pressure and reports that many of the miners had already died, the Department of Mineral Resources and Energy said it had begun plans to conduct a rescue operation at the abandoned shaft. The mineral resources department said “the decision to deploy rescue services was made independently” and not mandated by a court.

South Africa harbors up to 100,000 artisanal miners, known locally as “zama zamas” with most of the minerals derived from artisanal mining “sold to the black market, and international illicit mineral traders,” according to SAFTU.

The nation also loses more than $1 billion to illegal mining annually, with the black market trade in gold linked to violent turf wars, according to a parliamentary brief.

This post appeared first on cnn.com

Russia’s military on Tuesday said it would retaliate against Ukraine after Kyiv attacked Russian regions by firing six US-made ATACMS ballistic missiles, six UK-made Storm Shadow cruise missiles and launching one of the biggest drone attacks to date.

After Ukraine first launched ATACMS and British Storm Shadow missiles into Russia last year, Moscow responded on Nov. 21 by launching a new intermediate-range hypersonic ballistic missile known as “Oreshnik”, or Hazel Tree, at Ukraine.

Russia’s defence ministry said it had shot down all of the Western missiles fired by Ukraine at the Bryansk region, as well as 146 drones outside the war zone. It said two more Storm Shadows had been shot down over the Black Sea.

“The actions of the Kyiv regime, supported by its Western curators, will not go unanswered,” the defence ministry said.

The Ukrainian General Staff said it had struck as deep as 1,100 km (680 miles) inside Russia, targeting oil storage, refinery, chemical and ammunition plants in the Bryansk, Saratov, Tula and Tatarstan regions.

Kyiv did not say exactly how it struck the targets, but said that drone and missile forces were among the units involved in the attack.

Russian President Vladimir Putin said in November that the Ukraine war was escalating towards a global conflict after the United States and Britain allowed Ukraine for the first time to launch their missiles deep inside Russia.

President-elect Donald Trump has pushed for a ceasefire and negotiations to end the war quickly, leaving Washington’s long-term support for Ukraine in question.

Russia’s 2022 invasion of Ukraine has left tens of thousands of dead, displaced millions and triggered the biggest crisis in relations between Moscow and the West since the 1962 Cuban Missile Crisis.

Drone attack

The drone attack on Russia was one of the biggest to date.

Roman Busargin, governor of the Saratov region about 720 km (450 miles) southeast of Moscow, said the cities of Saratov and Engels, on opposite banks of the Volga River, had been subjected to a mass drone attack and there was damage to two industrial sites. Schools had shifted to remote learning, he said.

Ukraine attacked the same region last week and claimed to have struck an oil depot serving an airbase for Russian nuclear bomber planes, causing a huge fire that took five days to put out.

The Ukrainian General Staff said it had hit the Kristall Plant oil storage facility in Engels, part of an operation run by Ukrainian drone units and military intelligence.

The General Staff also said it had struck the Bryansk Chemical Plant, which it said produced ammunition for artillery, multiple launch rocket systems, aviation, engineering ammunition and components for cruise missiles.

The drone attack struck a munitions storage facility holding guided bombs and missiles at the Engels airbase in Russia’s Saratov region as well as other targets, a source in the Security Service of Ukraine said on Tuesday.

The General Staff said attacks on the Saratov Oil Refinery and the Kazanorgsintez plant triggered fires.

This post appeared first on cnn.com

For three days, Wang Xing lived in fear. His head had been shaved. He couldn’t sleep and was in a strange place where his captors forced him to type – the first phase of training for an unwanted role.

The 31-year-old Chinese actor had flown to Bangkok for what he expected to be a movie casting call. Instead, he was picked up at the airport and driven to a scam center in Myanmar’s Myawaddy, a notorious cyber-fraud hub across the border from Thailand.

Wang is among hundreds of thousands of people who have been trafficked into scam compounds – many run by Chinese crime syndicates – that have proliferated in civil war-torn Myanmar and other parts of Southeast Asia in recent years. Often lured by the promise of well-paying jobs or other enticing opportunities, victims are held against their will and forced to carry out online fraud schemes in heavily guarded compounds, where former detainees say beatings and torture are common.

But Wang considers himself one of the lucky few. On January 7, just days after he was reported missing in the Thai border town of Mae Sot, Thai police said they located him in Myawaddy and brought him back to Thailand, without revealing the details of the operation.

The actor’s subsequent safe return to China has spurred hundreds of Chinese families to call on their government to help find and free their loved ones, who they believe are still trapped in the scam centers. Some have been missing for months or even years.

Wang’s ordeal has also put pressure on Thailand. Chinese tourists are expressing their fears on social media about traveling to the Southeast Asian nation – with some canceling their trips – frustrating Thailand’s efforts to rebuild its pandemic-hit tourism sector, which counts China as its largest and most critical market.

Thai authorities have been in damage control, attempting to reassure worried Chinese tourists that the country is safe.

Upon Wang’s return to Thailand, Thai police officials stood by the actor as he addressed Thai media in English. After asking Wang to thank the Thai government on camera, the official said, “You think Thailand is safe for you, right? Can you speak in Chinese to tell people?”

“Thailand is quite safe, so there’s no need to worry,” Wang replied. “If I have the chance in the future, I will definitely come back here again.”

‘Glimmer of hope’

Shortly after Wang’s rescue, a joint petition from the families of 174 Chinese nationals missing in Myanmar trended on Chinese social media, pleading the government to do more to help bring them home.

“We have no intention of inciting any confrontation; we simply hope to genuinely draw the government’s attention and accelerate efforts to intensify and expedite crackdowns,” the petition said.

A spreadsheet was shared online for family members to fill in details of their loved ones. It has grown from the initial 174 to include more than 1,200 victims.

Among the cases listed is Zhang Huizhen, a 24-year-old fresh graduate who went missing in October on a trip to Thailand and Cambodia. Before she vanished, she shared her location with a friend showing she was near Mae Sot. She also texted her mother, saying she had been busy lately and might not be able to reply to messages promptly, her family said.

Zhang’s family reported her missing to police in their home province of Zhejiang and reached out to the Chinese embassy in Thailand for help, but they have not received any news about her for more than 70 days.

In a video filmed aboard a police plane heading back to Bangkok, Wang said he’d been on a shoot in Thailand in 2018 and didn’t fret over this one too much. It wasn’t until he was pushed into a car by armed men that he began to realize he may have been driven across the border to Myanmar.

Wang said at least 50 people were held in the same building as him. “There were more in another building, and people came from different countries,” he said.

Alarmed by Wang’s disappearance, his girlfriend shared a desperate plea for help online, which racked up hundreds of millions of views and made headlines in state media.

After his release, many Chinese social media users questioned what happened to the dozens of other people also trapped in the compound. “You can’t just save him because he’s famous, right?” said a top comment.

Li Jie, a cousin of 21-year-old Liu Junjie who disappeared in Myawaddy on January 5, said she hoped authorities in China and Thailand would work together to save more victims. “I feel that the power of public opinion is strong, so it gives me hope,” she said.

China has worked with authorities in Myanmar to crack down on scam centers in northern Shan state, near the Chinese border. In 2023, as ethnic rebel groups gained ground against Myanmar’s ruling junta, powerful warlord families – backed by the military to rule the region and oversee these fraud operations – were apprehended and handed to Chinese police.

Chinese authorities say large-scale scam compounds in northern Myanmar have been “completely eradicated,” with more than 53,000 Chinese “suspects” – including trafficked victims – sent back to China.

But many scam centers have moved further south in Myanmar, including to Myawaddy, according to NGOs and experts who have long tracked these criminal operations.

The Civil Society Network for Victim Assistance in Human Trafficking, an NGO based in Thailand, estimates that about 6,000 victims from 21 countries are held under duress at the scam compounds in Myawaddy, including about 3,900 Chinese nationals.

The deluge of headlines has also put pressure on the Hong Kong government to bring home a dozen city residents stranded in the scam canters.

Andy Yu, a former local councilor, who has been advocating for the families since last summer, said the government hadn’t made much progress – until Wang’s rescue.

Hong Kong dispatched a task force to Thailand this week to follow up on their cases. Officials said they had received “an eager response” from the Thai government but no timeline had been set for their rescue.

Travel scares

The publicity around Wang’s case couldn’t have come at a worse time for Thai tourist operators, who had been expecting a surge of arrivals during the Lunar New Year holiday, China’s peak travel season.

But there are signs Chinese tourists are looking elsewhere.

Over the weekend, flight cancellations from China to Thailand surged 150%, Chinese state media reported, citing data from travel analytics firm ForwardKeys. And on Xiaohongshu, an Instagram-like Chinese app that is often used for travel advice, users shared tips on how to cancel flights and hotels in Thailand with minimal costs.

A tour operator in southern Guangdong province said he had seen a significant drop in bookings to Thailand following the recent headlines, with reservations for the upcoming Lunar New Year holiday at just 40% of the total this time last year.

Hong Kong pop star Eason Chan canceled his upcoming concert in Bangkok, citing safety concerns for fans. Zhao Benshan, a Chinese comedy titan, also axed his February show in the Thai capital over “safety issues.”

Safety concerns about traveling to Thailand have gained traction in China before, including in early 2023, after the country reopened its borders from the pandemic. Later in the year, “No More Bets,” a Chinese thriller set in an unnamed Southeast Asian country where people are lured to work in scam factories, became a box office hit.

For nearly a decade before the pandemic, China was Thailand’s largest source of foreign tourists. But it saw a sharp drop in Chinese tourists in 2020 when China shut its borders and restricted “non-essential” overseas travel.

Last March, in an effort to boost tourism, the two countries waived visa requirements for each other’s citizens. China reclaimed its position as the top source of visitors in Thailand last year, though the number of Chinese arrivals only recovered to about 60% of pre-pandemic levels.

The latest safety fears sparked by Wang’s abduction could pose a challenge to Thailand’s efforts to further boost that number.

Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents, acknowledged that these concerns would undoubtedly affect the Chinese tourism market, particularly among tour groups. However, he said the extent of the impact remains uncertain.

This post appeared first on cnn.com

Australia has vowed it will take the “strongest action possible” if Russia has harmed one of its nationals captured fighting for Ukraine, after reports emerged the prisoner of war may have been killed.

Oscar Jenkins was captured by Russian forces last month, after which a video surfaced of him being questioned while dressed in a military uniform.

Speaking at a press conference on Wednesday, Australian Prime Minister Anthony Albanese said his government has been “seeking urgent clarification” on the situation, adding it is “gravely concerned.”

“We have called in the Russian ambassador already,” he said.

“We will await the facts to come out. But if there has been any harm caused to Oscar Jenkins, that is absolutely reprehensible. And the Australian government will take the strongest action possible.”

He declined to elaborate on what actions Canberra might take.

Speaking in a mix of English, Ukrainian and Russian, he identifies himself as “a soldier” and says he is a teacher in China and a student in Australia.

Jenkins is thought to have joined an international brigade among the Ukrainian ranks, which have recruited many foreign fighters since the war began in February 2022. The Australian government advises its citizens against traveling to Ukraine to fight, but some have nonetheless chosen to volunteer with international brigades.

At least seven Australians are believed to have died fighting in Ukraine, according to ABC, but none was known to have died while being held captive.

Prisoner of war

Originally from Melbourne, Jenkins has worked as a university lecturer in the Chinese city of Tianjin since 2017, according to a LinkedIn profile under his name.

If he was killed, he would be the first Australian to have died while being held as a prisoner of war in more than half a century. The last person to have died under such circumstances was H. W. Madden, who was captured during the Korean War in the 1950s, according to the Australian War Memorial.

Australia has repeatedly condemned Russia’s invasion of Ukraine and has given Kyiv close to $1 billion in assistance since 2022, while its military has provided training for Ukraine’s armed forces.

Australia’s Foreign Minister Penny Wong was in Kyiv last month to announce new assistance packages, and the reopening of Canberra’s embassy in the Ukrainian capital.

During an interview with ABC on Wednesday, Wong said her department has been “working very hard” to ascertain the facts surrounding Jenkins’ safety.

“Russia is obliged to treat all prisoners of war in accordance with international humanitarian law,” Wong said. “I want to be clear all options are on the table.”

Multiple reports have emerged throughout the course of Russian troops executing prisoners of war which is a war crime under international law.

This post appeared first on cnn.com

Rashida Jones, the president of MSNBC, announced Tuesday that she is stepping down after four years of steering the cable news network.

Jones, who made history as the first Black executive to lead a major U.S. television news network, made the announcement to top MSNBC anchors, leaders and network staff on Tuesday morning. (MSNBC and NBC News are both units of NBCUniversal.)

Rebecca Kutler, the network’s senior vice president of content strategy, was named interim MSNBC president. Jones, who recruited Kutler to the network in 2022, plans to stay on in an advisory role until March.

Rebecca Kutler will be interim president of the network.MSNBC

“I came to this decision over the holidays while reflecting on our remarkable journey and the many successes we’ve achieved together as a team. This has been the most rewarding chapter of my professional career and I am immensely proud of what we have accomplished, which has been made possible only by you,” Jones said in a memo to staff.

The announcement comes nearly two months after Comcast announced a plan to spin off most of its cable TV networks into a separate publicly traded company, currently known as SpinCo. The new company will include MSNBC, CNBC, the USA Network, Oxygen, E!, SYFY and the Golf Channel.

Jones took charge of MSNBC in February 2021 after the inauguration of President Joe Biden and the Jan. 6 riots at the U.S. Capitol. She drove MSNBC to ratings triumphs on major political nights.

She retained and signed new long-term deals with the network’s top talent, including Rachel Maddow. She also created a live event series; relaunched a new mobile app and premium subscription series; and made investments in other network digital offerings.

MSNBC has seen a post-election ratings dip. The network still ended last year as the No. 2 network across cable, with 807,000 average viewers daily and 1.3 million viewers in the prime-time hours.

Rashida Jones.MSNBC

The cable television business writ large is at a crossroads as consumers move toward streaming alternatives such as Netflix and Amazon Prime Video. In this business environment, some cable channels remain profitable with healthy cash flows, but other brands have rapidly declined.

In a memo to staff, Mark Lazarus, the incoming chief executive of SpinCo, praised Jones for her years helming MSNBC.

“Rashida has expertly navigated MSNBC through a years-long, unrelenting and unprecedented news cycle, all while driving the network to record viewership and making investments in nonlinear businesses. MSNBC is well-positioned for the future,” Lazarus said in a memo to staff.

Lazarus told staff members on a network call that MSNBC will retain its name after the spin-off transaction is complete.

Jones previously served as senior vice president of NBC News and MSNBC, overseeing and leading the production of cross-network special events, including election night coverage and presidential debates.

Kutler came to MSNBC from CNN, where she spent two decades, most recently as a senior vice president.

This post appeared first on NBC NEWS

Boeing handed over 348 airplanes in 2024, about a third fewer than it did a year earlier as the aerospace giant struggled with a crisis after a midair door panel blowout a year ago and a machinist strike in the fall that halted production.

The tally widened the delivery gap with Boeing’s chief rival, Airbus, which gave 766 jetliners to customers last year, the most since 2019, though both companies are facing supply chain strains that have slowed production and fulfillment of their otherwise robust backlogs.

In December, Boeing delivered 30 airplanes as it restarted production of its bestselling 737 Max planes after the nearly eight-week machinist strike ended the month before. Deliveries are key for manufacturers because it is when customers pay the bulk of an airplane’s price.

A shortage of aircraft from suppliers has driven up lease rates, with rentals expected to hit records this year, aviation data firm IBA said in a report this month.

Boeing logged 142 gross orders in December for new planes, including 100 737 Maxes for Turkey’s Pegasus Airlines and 30 787s for flydubai, whose intention to purchase was first unveiled at the Dubai Air Show in late 2023. Boeing also took more than 130 orders off its books for India’s now-defunct carrier Jet Airways.

Boeing’s gross orders for the year stood at 569, while net orders were 377 airplanes — 317 including accounting adjustments. Airbus, which released its December and full-year tally last week, said it logged 878 gross orders last year and 826 net orders.

Boeing is scheduled to report fourth-quarter and full-year results before the market opens on Jan. 28, when CEO Kelly Ortberg and other Boeing leaders will face investor questions about their plans to ramp up production and restore the aerospace giant’s profitability.

This post appeared first on NBC NEWS

Southwest Airlines is pausing corporate hiring and promotions, suspending most of its summer internships and going without some employee team-building events that date back to the 1980s in order to cut costs and improve margins, CEO Bob Jordan told staff.

“Every single dollar matters as we continue to fight to return to excellent financial performance,” Jordan said in the note Monday, which was seen by CNBC.

He said the company will delay other activities “when it makes sense.”

A Southwest spokeswoman confirmed the changes.

“We’ll continue to evaluate hiring needs on an ongoing basis to determine when it makes sense for the business to resume hiring,” she said in an email.

As part of the cost cuts, Southwest is pausing its employee “rallies,” a company team-building tradition that dates back to 1985 in which staff hear from the airline’s leaders about the year’s goals and are treated to food and entertainment.

Southwest spent months last year under pressure from activist Elliott Investment Management, which called for a CEO change at the carrier. The two sides settled in October with Elliott winning five Southwest board seats, short of control, and Jordan remaining in the top job.

“We made a lot of progress in 2024, and we have a lot of tangible momentum … but we’re still far from our goal of returning to industry-leading profit margins,” Jordan wrote. “A key risk in 2025 is acting as if the urgency has passed and therefore not sustaining the focus and energy from 2024.”

The airline last year charted out a plan to increase profits that includes ditching its more than 50-year-old open seating model in favor of assigned seats and creating a section with extra legroom, flying overnight flights, and more aggressively cutting back unprofitable routes.

In September, the company slashed its flights from Atlanta, eliminating jobs, though staff were able to apply to work out of other bases.

Southwest is scheduled to report fourth-quarter results on Jan. 30. The carrier’s shares are up 14% over the past 12 months, while United’s are up more than 160% and shares in Delta Air Lines and American Airlines have gained about 70% and 33%, respectively.

This post appeared first on NBC NEWS

S&P 500 earnings are in for 2024 Q3, and here is our valuation analysis.

The following chart shows the normal value range of the S&P 500 Index, indicating where the S&P 500 would have to be in order to have an overvalued P/E of 20 (red line), a fairly valued P/E of 15 (blue line), or an undervalued P/E of 10 (green line). Annotations on the right side of the chart show where the range is projected to be based upon earnings estimates through 2025 Q3.



Historically, price has usually remained below the top of the normal value range (red line); however, since about 1998, it has not been uncommon for price to exceed normal overvalue levels, sometimes by a lot. The market has been mostly overvalued since 1992, and it has not been undervalued since 1984. We could say that this is the “new normal,” except that it isn’t normal by GAAP (Generally Accepted Accounting Principles) standards.

We use GAAP earnings as the basis for our analysis. The table below shows earnings projections through September 2025. Keep in mind that the P/E estimates are calculated based upon the S&P 500 close as of December 31, 2024. They will change daily depending on where the market goes from here. It is notable that the P/E remains outside the normal range.

The following table shows where the bands are projected be, based upon earnings estimates through 2025 Q3.

This DecisionPoint chart keeps track of S&P 500 fundamentals, P/E and yield, and it is updated daily — not that you need to watch it that closely, but it is up-to-date when you need it.

CONCLUSION: The market is still very overvalued and the P/E is still well above the normal range. Earnings have ticked up and are projected to trend higher for the next four quarters. Being overvalued doesn’t require an immediate decline to bring valuation back within the normal range, but high valuation applies negative pressure to the market environment.


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Technical Analysis is a windsock, not a crystal ball.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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Bear Market Rules

S&P 5850 has been the most important “line in the sand” for stocks since the pullback from the 6000 level in November 2024. With the SPX closing below that 5850 level on Friday, we see further corrective pressures with the 200-day moving average as a reasonable downside target. Today, we’ll break down a series of projection techniques that have helped us hone in on this potential area of support.

The Break of 5850 Completes a Head-and-Shoulders Top

One of the most widely-followed patterns in technical analysis, the fabled head-and-shoulders topping pattern, is formed by a major high surrounded by lower highs on each side. After the S&P 500 established a lower high in December, we immediately started looking for confirmation of this bearish pattern.

To confirm a head-and-shoulders top, and initiate downside targets on a chart, the price needs to break through the “neckline” formed by the swing lows between the head and two shoulders. While price pattern purists may advocate for a downward-sloping trendline to capture the intraday lows of the neckline, I’ve been focused on the price level of SPX 5850. As long as the S&P remained above that level of support, then the market could still be considered in a healthy bullish phase. But a close below the 5850 level on Friday tells me that this corrective move may just be getting started.

Let’s consider some ways to identify a potential downside objective, first using the pattern itself.

Calculating a Minimum Downside Objective

As delineated in Edwards and Magee’s classic book on price patterns, you can use the height of the head-and-shoulders pattern to identify an initial downside objective. Basically, take the distance from the top of the head to the neckline, and then subtract that value from the neckline at the breaking point.

Based on my measurements on the S&P 500 chart, this process yields a downside target of right around 5600. It’s worth noting that Edwards and Magee considered this a “minimum downside objective”, implying that there certainly could be further deterioration after that point has been reached.

Now let’s consider some other technical analysis tools that could help us to validate this potential downside target.

A Confluence of Support Confirms Our Measurement

If we create a Fibonacci framework using the August 2024 low and the December 2024 high, we can see a 38.2% retracement around 5725, which lines up fairly well with the swing low from late October. Perhaps this could serve as a short-term support level during the next downward phase?

As I review the chart, however, I’m struck by the fact that the 50% retracement lines up almost perfectly with our price pattern objective. Many early technical analysts, including the infamous W.D. Gann, favored the 50% retracement level as the most meaningful to watch.

You may also notice that the 200-day moving average is gently sloping higher, rapidly approaching our “confluence of support” around 5600. Given the agreement between multiple technical indicators on this price point, we consider it the most likely downside target given this week’s breakdown.

I would also point that while I feel that identifying price targets can be a helpful exercise, as it gives you a framework with which to evaluate further price action, the most important signals usually come from the price itself. How the S&P 500 would move between current levels and 5600 may tell us a great deal about the likelihood of finding support versus a more bearish scenario in the coming weeks.

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!


David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.