ES is Stuck in a Megaphone Inside a Megaphone Inside a Megaphone Inside a Megaphone – Could Have Set Up a Breakout From It All But Didn’t
ES is stuck inside a megaphone inside a megaphone inside a megaphone inside a megaphone–and I’m simplifying.
It’s put in fake breakouts through three H&S necklines (red).
It could have set up a price channel overnight and be heading down to break out from all of it–but it climbed too far, canceling the potential melt-down set-up.
It could still get to 2000-2010ish (purple scenario) but it could also set up a Sornette melt-up to a squeaker new all-time high (green scenario).
It could also start a new megaphone near 2050 to draw a larger triangle right shoulder (blue scenario) on the potential H&S on the chart–which is not yet dead. The blue scenario would almost always break out downwards into a big move.
The purple and blue bearish scenarios would be limited to a move to the orange megaphone bottom, or a little bit through it to form a bottoming formation. The faster the move down and bigger the bottoming pattern, the more likely that the orange megaphone would ultimately break out the top.
The green scenario would likely ultimately lead to a deep pullback as well, with the most likely target a break of the bottom of a newly-confirmed multi-year rising megaphone on the daily and weekly charts.
A New All-Time High on ES would Confirm a 5-Year Rising Megaphone (Red)
On twitter yesterday a chart of AAII investor sentiment was getting passed around that showed individual investors as bearish as at the February 11 low.