E-Mini S&P 500 has now put in two fake breakouts through potential head and shoulders necklines (red on chart) and with a higher right shoulder high this morning has confirmed a megaphone right shoulder (bright blue on chart).
That means this head and shoulders is highly likely to be a fake. However, that right shoulder megaphone still needs a retrace to at least its VWAP to complete, and it could go for the bottom one more time.
What usually happens with a megaphone right shoulder is that the price goes for another new high past the head of the potential head and shoulders, and that turns out to be the head of a real head and shoulders.
But even then you have to be careful, because these waves can continue to extend. Just as you can have a topping megaphone within a topping megaphone within a topping megaphone within a topping megaphone to extend a move up within a megaphone, you can have a fake head and shoulders within a fake head and shoulders within a fake head and shoulders within a real head and shoulders.
Then finally you get a small head and shoulders that completes and breaks out downwards and sends the whole contraption crashing down.