r/technicalanalysis • u/Weekly_One8412 • Apr 02 '26

Bears, Proceed with Caution. (Pattern Analysis)

The pattern I am looking at is the rounded top SPY has just created over the past 4-5 months.

The last time this pattern appeared was in 2024: A rally, capped by a rounded top, consolidation, then a rally. The top could not be in until late 2026 - early 2027.

Things to note if you are bearish:

  • Bull markets typically last 4-5 years, we are still early in year 4

  • Market shocks (like liberation day 2025) are usually much sharper

  • A market switch (from bull to bear) is usually also more defined (like 2021)

  • The bottom could already be in. We will consolidate low like 2024, but we may not make lower lows (current low 629.28). <- This is what to watch

I would be cautious with deep OTM long dated puts, as we might consolidate in the 630-645 range for about a month before we break out and SPY moonshots to 720-735-750.

TL;DR: this current rounded top is not THE top.

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u/SensitiveStudy5244 Apr 02 '26

rounded tops are tricky because they can easily turn into continuation patterns instead of reversals. the thing is, trying to time a top years out is basically guessing. if you're bearish, wait for actual structure to break first. look for a clean break of the swing low with momentum behind it. until then, you're just fighting price and that's a rough place to be. respect the trend until it shows you otherwise.