I am writing this post after reading Michael Harris’ article “A Top Formation in S&P 500 Index”. Michael has touched a subject of rigid, straightforward interpretations of consolidation patterns leading to mistaken conclusions of possible outcomes. I couldn’t agree with him more. The human brain is hardwired to look for and find repetitive patterns even in an environment where they don’t exist. Rather than trying to fit the chaotic price movement of a loose consolidation into one of the preconceived patterns let’s look at the ongoing consolidation in the S&P 500 within a broader price action context.