Potential Triangle Right Shoulder, Potential Inverse H & S Right Shoulder, Potential Lower Low
- ES may be forming a triangle here, which would be a triangle right shoulder on its inverse H&S.
- Or it may be forming an inverse H&S right shoulder here, which would mean a deeper dip this morning.
- Or it could still go for a lower low here for this correction. (That is a less likely scenario because of the formation at the current low of this dip.)
Any of those are bullish for immediately after the move or formation completes. A right shoulder triangle on an inverse H&S tends to break out upwards.
A lower low here would just complete a larger falling megaphone and make a new high more likely after. The most bullish scenario would be a tag of the bottom of the potential new price channel (orange on chart) followed by a new high within the channel.
During triple witching the (ARCA:SPY) put-call ratio usually closes Thursday at or through the ratio’s bottom Bollinger Band®, and it gets there on a rally. The FOMC announcement is an obvious potential catalyst.
The easiest play here is to be out of the market until it makes a breakout through the top of the falling megaphone. That’s the bright blue falling trend line that ES is now massing against. The breakout would be a set-up to go long to roughly the current high. The massing itself suggests a breakout imminent.
If ES confirms the new orange price channel, the target may change. If ES should complete a triangle here and break out downwards from it (unlikely), that would be a set-up to short to a probable lower low.
Which stock should you buy in your very next trade?
With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities.
In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record.
With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.