ES: Set-Ups For 2100 Vs. 1750
Trader Moe | Jan 12, 2016 12:38AM ET
ES Came Close to the Potential Triangle Bottom Line that Everyone is Watching
The SPX bounced today on the approach to the potential triangle bottom (orange) that everyone is watching. Is that it? Is the move over?
I’d be more impressed by the bounce if ES had melted up harder and if it hadn’t spent the entire day putting in a redo of Friday.
ES Spent the Day Putting in a Repeat of Friday
So how do you tell whether to get long here for a trip to the triangle top?
ES has a confirmed falling megaphone on its 15-minute chart (blue in chart below). Falling megaphones usually bottom with an inverse H&S. Usually the right shoulder is a pullback from the falling megaphone top, but occasionally the price will break out and the right shoulder will be a retest of the formation top.
ES Falling Megaphone
If ES breaks out of the blue falling megaphone, its minimum target is 2000 and it could melt up all the way to the big orange triangle top.
But ES is still a favorite to put in a lower low first to complete a proper inverse H&S, and there is nothing on the chart at the moment to suggest that it won’t plunge to at least its mandatory retrace target of 1850 (especially if it can get through the orange triangle bottom overnight) and possibly 1750 at the bottom of the blue falling megaphone.
If ES tries to break out from the blue falling megaphone but ends up megaphoning across the breakout point instead, it’s a strong favorite to plunge down to a much lower low within a larger falling megaphone.
Get The News You Want
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.