You are probably familiar with the classic “head and shoulders” chart pattern. But, in case you need a refresher, here’s a brief description of a head and shoulders top: The high of an initial upward move is the left shoulder. After a decline, another upward move takes prices to a higher high, or the head. A second decline follows the head. A third rally then takes prices to a peak below the high of the head, and becomes the right shoulder. The left and right shoulders are often similar in duration and extent. A trendline connecting the two lows is called the neckline. When prices penetrate the neckline, a change of trend is believed to have occurred. Head and shoulders bottoms also occur and the same description applies except in reverse. This head and shoulders measuring formula — showing a top as an example — provides even more insight. The commentary is from a past issue of Elliott Wave International’s Trader’s Classroom: