ES is Trying to Confirm the Gray Triangle but the Red Triangle is More Likely
A triangle is still likely here, and right now ES is trying to confirm the gray triangle on the chart above.
But the way the breakout from the blue rising megaphone played out would usually mean a higher high to top the melt-up out of the mini Brexit crash.
So ES is likely to redraw the gray triangle into the red triangle.
The triangle could break out in either direction. It’s got odds a little better than a coin flip of breaking out the top.
ES has Confirmed a 5-Year Rising Megaphone (Blue) on its Daily & Weekly Charts
This likely triangle is forming as the right half of a diamond pattern within a 5-year rising megaphone. If the triangle breaks out the top, it could launch ES into a 300-point melt-up with a Sornette melt-up set-up (green scenario). I’ll post more about that if we get the breakout through the top.
If ES breaks out through the triangle bottom, it’s likely to pull back to the bottom of the 5-year rising megaphone and break that line by a bit. In that case, the market would still likely be headed for a significantly higher high, but as part of a far more complicated and prolonged sideways move (purple scenario).