ES Friday Close

ES is Legal for a Trip Down to the Blue Megaphone Bottom Sunday Night, but Could Make One Final Trip to the Orange Interior Megaphone Top

ES is Legal for a Trip Down to the Blue Megaphone Bottom Sunday Night, but Could Make One Final Trip to the Orange Interior Megaphone Top First

ES 2075 should be the critical decision point for whether to reverse up to a new all-time high or head down to the bottom of the 3-year+ price channel at roughly 2020.

A trip to the bottom of the 3-year+ price channel is still the favorite.

LNKD at Critical Decision Point

A Breakout Through LNKD's H&S Neckline (Red) would Target the Navy Megaphone Bottom

A Breakout Through LNKD’s H&S Neckline (Red) would Target the Navy Megaphone Bottom

LNKD has drawn a clear head and shoulders on its chart with a neckline (red) at VWAP of the megaphone it’s been working on since March 2013. A breakout through the neckline would target the navy blue megaphone bottom.

If you start seeing fake breakouts and higher right shoulder highs, it suggests a megaphone right shoulder is forming. That would usually get LNKD back to its navy blue megaphone top one more time.

A triangle right shoulder would confirm the H&S and greatly raise the odds of a breakout downwards.

ES Inverse H&S Right Shoulder Megaphone

ES has Put a Right Shoulder Megaphone on its Inverse H&S (Pink Neckline)

ES has Put a Right Shoulder Megaphone (Blue) on its Inverse H&S (Pink Neckline)

ES has confirmed a right shoulder megaphone (blue) on its inverse H&S (pink neckline at 2101).

The megaphone is legal for a breakout upwards (pink scenario, which is also a Sornette melt-up set-up), but the price would usually make another trip to the formation bottom (green scenario).

A right shoulder megaphone on an inverse H&S increases the odds that the price will put in a lower low (purple scenario) as the head of a larger inverse H&S.

The purple scenario is the favorite because ES still requires a tag of its 3-year+ price channel bottom at roughly 2020.

GDX Reached the Bottom of its Long-Term Falling Wedge Bottom Today

GDX Reached the Bottom of its Falling Wedge (Blue) Today

GDX Reached the Bottom of its Falling Wedge (Blue) Today

GDX reached the bottom of its falling-wedge bottom (blue) today.

The low so far is an exact touch on the wedge bottom.  A major correction like this one would usually not end on an exact touch like that.  Usually we’d see a break of the formation bottom or some kind of sideways move like a megaphone to end this big correction.

A Bigger Inverse H&S

Another Inverse H&S (Pink Neckline)

Another Inverse H&S (Pink Neckline)

Forgot to mention that ES also has a bigger H&S on its short-term chart, with a neckline right at its megaphone VWAP at roughly 2101.

You know what to do on an upwards breakout. If you start seeing fake breakouts and a megaphone right shoulder, it would often lead to a lower low.

Gold Still in Price Channel?

Gold is Respecting its Navy Blue Rollover Price Channel - Suggests is has Lower to Go

Gold is Respecting its Navy Blue Rollover Price Channel – Suggests it has Lower to Go

Gold had a potential inverse head and shoulders bottom on its chart. But it has failed to break out through the neckline and now appears to be heading for a lower low.

I warned it had a good chance of doing that, but now I think it will likely go even lower than suggested earlier.

Gold appears to be honoring the top of its navy blue rollover price channel. I drew that channel on the chart when gold first broke out of the gray channel, using old-timer rules laid out in John Murphy’s classic Technical Analysis of the Financial Markets. Though gold put in a weird overnight plunge on low volume that took out the navy blue channel bottom, after recovering from the plunge gold has been acting like it meant to be in that channel all along.

If gold continues honoring its navy blue price channel, it likely has another couple of lower lows to put in as it forms a bottom.

The alternative is a prompt breakout through the top of the navy blue channel to break out through the neckline of the inverse H&S on the chart.

Potential Melt-Up Set-Up

Potential Sornette Melt-Up Set-Up within Potential Rising Megaphone

Potential Sornette Melt-Up Set-Up within Potential Rising Megaphone

ES has a potential mini Sornette bubble set-up within a potential rising megaphone (blue) on its 5-minute chart.

Watch for a higher high on the megaphone across 2101, then a retrace to VWAP and breakout upwards (purple scenario), or for the new megaphone high to turn into a double bobble and break out upwards (green scenario).

Sornette set-ups that fail do it most often on a failed second bobble. In that case, ES may be topping here for a dip to 2073.50 and possibly 2020 and the bottom of the ES/SPY 3-year+ price channel.

DX Breakout Would Target 101

If the DX can Break Out Past its July High its Target is Roughly 101

If the DX can Break Out Past its July High its Target is Roughly 101

The Dollar Index has a confirmed megaphone on its chart (orange) that is now legal for an upwards breakout (though it won’t look like a breakout on the daily chart).

A breakout past the July high would target roughly 101, where it ought to reverse for a trip back to retest the lows of its multi-month trading range.