ES Could Still Break Out Downwards from the Red Megaphone but Only to the Navy Blue Megaphone Bottom
ES worked on the red megaphone all day yesterday, with big swings up and down on the Fed minutes. On the move down, TICK hit -1637–that would usually mean that the red megaphone would break out upwards.
Everyone on twitter is talking about the big head and shoulders on the 60-minute chart (posted yesterday). But good head and shoulders breakouts don’t usually come from a series of megaphones like the ones on the chart above. Good breakouts usually come from a fast pop into a right shoulder followed by a price channeled move down that breaks out into a melt-down channel.
Potential Double-Headed Inverse H&S with Neckline at 2080 would Target a New All-Time High
Yesterday’s hard move down put a potential double-headed inverse H&S on the chart with a neckline at roughly 2080–a level that’s been critical for over a year.
A Megaphone Right Shoulder would Usually Mean a Squeaker New High
But if opex should pull ES down despite yesterday’s low TICK, the small megaphones on the top chart strongly suggest a megaphone right shoulder on the big H&S on the 60-minute chart.
Either way, ES is likely to put in a squeaker new all-time high before any larger retrace.