ES Triangle (Orange) is Legal for Downwards Breakout, Would Create Pink Falling Megaphone
There’s now a large triangle (orange) on the ES chart that is legal for a downwards breakout. And as long as that triangle’s top holds, a lower low will confirm the pink falling megaphone, with this holiday delay sharply lowering the formation bottom and target. Falling megaphones tend to complete with a plunge through the formation bottom.
ES has put a rising wedge (red) within the orange triangle since Sunday night. The move out of Friday’s low is also an ABC with a megaphone (blue) top. ES is working on an H&S top for that blue megaphone at the moment.
The most likely scenario is the purple one–a retrace from here to roughly 2000, and then a melt-up to 2044 and a megaphone across that level to tag or slightly pierce the orange triangle top before a big move downwards.
I have a timing rule that requires ES to retest the August 24 low by roughly mid-January.
Update: Here’s a close-up of the blue megaphone and scenarios.
Close-Up of ES Blue Megaphone with Scenarios
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