E-Mini S&P 500: Potential Short Set-Ups
Trader Moe | Nov 02, 2014 01:19AM ET
Since ES has already nicked the bottom of its new pink breakout price channel at a time when it should be melting up to the channel top, it’s like already forming a topping pattern here.
I’ve drawn some of the potential topping scenarios on the chart -- there are others, more than I can fit in the chart.
In general, I’d short a triangle here that broke out downwards back into the navy blue price channel.
If the triangle breakout didn’t last, I’d get long again on another breakout upwards through the blue price channel top in case the formation was turning into a head and shoulders with a big head.
Other possible topping formations would be an ending diagonal along the navy blue price channel top (or across it) or a rising megaphone top with a bottom along the navy blue price channel top. We’d get the rising megaphone scenario if we see a head and shoulders form here with a right shoulder that breaks out upwards.
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