Stocks Still Wobbly

Stocks have made an attempt to recover from Friday's selloff, but we have met strong resistance at 3978, about midway through the failed inverse head and shoulders pattern. We noted that this is a very ominous sign for stocks and in the past, from which it will be difficult to recover. It also suggests that 4068 (the necline of the inverse H&S) will be a very tough level to break, and currently, the S&P 500 does not seem to have the momentum to even test this. The Kovach OBV is extremely bearish, suggesting we are due for a relief rally. However if the selloff continues, expect support at 3810 again.