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I'm still watching this pennant and waiting for the break that should have interesting implications for the stock market for the remainder of 2010.

After watching the head and shoulders top form over the past few months it's interesting to note that an inverted head and shoulders pattern (bottom) may now be forming in the S&P 500 Index:

Should stocks pull back (1040-50 seems reasonable) and form a right shoulder over the next few weeks without breaking the pennant down in the first chart this may set the stage for a significant rally into the fall (the 1220 high set earlier this year would be a logical projection). 

What's more, this sort of action would catch most investors off guard Рjust the way a contrarian-minded trader would like it. Then again, I'm probably getting ahead of myself. Let's just wait and see how the flag shakes out, shall we?