You often see two false breakouts from rising or falling wedges (including rising or falling megaphones) before the real breakout.
SPY had two false breakouts from its rising megaphone (orange lines on the chart) before its third breakout on October 22. Now the price needs to retest the top of the rising megaphone. It could also do something like form a triangle across the top. But this dip hasn’t reached the top yet. See close-up below.
Close-up of SPY Breakout Through Ascending Megaphone Top
I’ve mentioned before that in order to complete, the orange rising megaphone needs a substantial spike through the top. It should look something like the one that completed gold’s rising megaphone.
Gold’s Rising Megaphone Completed with a Spike
Since this is the third breakout for SPY, this one would usually lead into the spike.
The DX has reached the area of its orange megaphone VWAP. It can either turn here and break out the bottom of the megaphone, or it can break out upwards through VWAP heading to the megaphone top. We should then see a retest of VWAP before a breakout through the top of the orange megaphone.
The upward breakouts are more likely but not guaranteed.