There’s a New Potential Mini-Head And Shoulders, on ES 2-Minute Chart (Pink Neckline) – Will Likely Morph into a Megaphone
The Greek election results caused ES to break out downwards on Sunday night from last week’s new price channel. That stopped me out. But when megaphones are interrupted by sharp moves on news, the price tends to resume megaphoning pretty quickly after the initial shock.
The move on the election results put a potential head and shoulders on the move up out of the January 15 low (pink neckline on chart). In a spot like this, that formation has high odds of being a fake Head and Shoulders.
If we see a fake breakout through that neckline and a genuine breakout back up through the neckline, ES is likely forming a megaphone right shoulder on the formation, which means you can expect it to take out the 2060 area, and likely seek out a new all-time high, before a move to the low 1900s area (green scenario on chart).