S&P 500: Top Could Be In
Trader Moe | Mar 04, 2016 10:14AM ET
Top Could Be In or ES Could Megaphone Some More Up Here or Could Retrace to 1950 Before One Final New High
ES has now put both an extended rising wedge top on its 60-minute chart and a set of smaller and smaller topping megaphones on topping megaphones on topping megaphones.
NYMO is ridiculously overbought and the equities put-call ratio reached its bottom Bollinger® Band yesterday, at roughly the level it hit when the market topped in late December.
The top could be in, or ES could megaphone a little while longer up here, or ES could retrace to roughly 1939-1950 at its red rising megaphone bottom and then melt up to a final higher high for the move out of the February 11 low. For the final scenario, we’d likely see ES break out of the red rising megaphone on a retrace to the 1939-1950 area, then start a megaphone right shoulder on a H&S across the breakout point.
When an H&S top completes and ES breaks out of the red rising megaphone–preferably at the same time as the H&S top completes–ES must head down to its mandatory retrace target of roughly 1805 at the bottom of the orange and blue megaphones. After a retrace to the blue megaphone VWAP ES could reverse for a breakout downwards to the low 1600s or continue up to the megaphone tops again.
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