ES Megaphone in Megaphone
This morning’s ES potential Sornette melt-up set-up morphed back into a megaphone (blue) when it failed to break out this morning.
Now ES is forming an interior megaphone (red) to get the price back to at least the blue megaphone VWAP and probably to a new high for the day.
The most likely scenario after that is a trip back to the blue megaphone bottom to take out yesterday’s low.
That will set up a new larger megaphone on the chart, and any kind of little bottoming pattern down at the new low will be a set-up to go long to the new megaphone top. The new megaphone is drawn on the same chart in purple below.
A Trip to the Blue Megaphone Bottom would Set Up the Purple Megaphone on ES
ES should be stuck in the purple megaphone for a while until it eventually breaks out the bottom.