ES has a potential head and shoulders formation on its chart with a neckline at the top of the triangle it had formed since February.
But the late day melt-up also qualified as Part 2 of a mini Sornette bubble.
So, ES should retrace at least into the area of the potential H&S left shoulder. If it fails to make it back to the potential neckline at the triangle top, and instead breaks out upwards past the high before that retrace, it’s in Part 3 of the Sornette bubble with a target at the purple megaphone top where it would put in the final little topping megaphone before a correction to the area of the October low.
En route to that megaphone top and another new all-time high, it could put in a false top at the area of the current all-time high and retrace to the megaphone VWAP at ES 2110 before continuing to the new high.
If instead we see the little H&S form, short on the downward breakout for a big move.
Tomorrow’s the FOMC announcement.
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