Potential Double-Headed Inverse H&S on ES 2-Minute Chart
ES is attempting to break out through the neckline of a potential double-headed inverse H&S this morning (red neckline on chart above). But it has formed a clear, small megaphone across the neckline, and that puts the breakout in doubt.
An upwards breakout from the megaphone would be a breakout from the inverse H&S with a target of roughly 2080. A downwards breakout from the little megaphone could mean ES is going to take out Friday’s low and put a falling megaphone on the chart (blue in chart below).
Potential Falling Megaphone on ES
A lower low here would suggest a deeper retrace of the move off the April 20 high. And, since it would likely put a megaphone right shoulder on the H&S on the chart, it would suggest a squeaker new high for a larger potential H&S.
As I’ve mentioned in earlier posts, I wouldn’t underestimate the pull of 2080 on ES, which spent March 2015 to August 20, 2015 vibrating across that level.