Rising Megaphone Set-Up on ES

ES Pierced the Bottom of the Orange Rising Megaphone and Then Headed Up into a Potential Right Shoulder or New Megaphone High

ES Pierced the Bottom of the Orange Rising Megaphone and Then Headed Up into a Potential Right Shoulder or New Megaphone High

ES fell to the bottom of a rising megaphone (orange) on its shorter-term charts and pierced the line a bit. Then it reentered the formation, heading back to at least the purple megaphone VWAP at roughly 2080.

A reversal at 2080 puts a H&S top on the orange rising megaphone. A breakout downwards from the rising megaphone and H&S would target 2010. Then we’d see if ES can put in a simple right shoulder to complete a larger H&S.

If ES reverses at 2080 but starts a megaphone on the breakout from the orange rising megaphone, it will likely megaphone its way to both a squeaker new high and 2010.

ES could also make it through 2080 to melt up to the purple megaphone top and put a new head on a larger potential H&S.

Mini Sornette Melt-Up Set-Ups

Potential Sornette Melt-Up Set-Ups (Purple One More Likely)

Potential Sornette Melt-Up Set-Ups (Purple One More Likely)

Here are some potential Sornette melt-up set-ups on the 2-minute chart.

The purple one is more likely.

When they fail, it’s usually in the 2nd bobble in the course of trying to break out upwards.

If it succeeds, minimum target is 2080.

The green/pink scenario set-up is likely too small to get all the way to 2080, would require a Part 3 (pink) after pullback.

ES Mini Price Channel

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ES Formed the Blue Price Channel on Today’s Drop – If the Price Regains the Channel Top, it’s Forming a Consolidation, Likely a Bottom

ES formed a price channel (blue) on today’s drop. The channel is bouncing off its critical decision wave. If it reaches the channel top, the price is consolidating–likely forming a bottom.

DX is in the Critical Decision Wave of a Price Channel

The Dollar is in the Critical Decision Wave of a Price Channel (Blue) - Melt-Down Set-Up vs. Bottom

The Dollar is in the Critical Decision Wave of a Price Channel (Blue) – Melt-Down Set-Up vs. Bottom

The Dollar Index (DX) is in the critical decision wave of a price channel (blue). This is where the DX either sets up a breakout into a melt-down channel or starts a bottom.

As recently as a year ago, a melt-down would usually start with a small pierce of the channel bottom, followed by a partial pullback into the channel, and then the breakout into the melt-down.

But the bots seem to know this set-up now, so they usually put in a fake breakout after the initial channel pierce even if a bottom is starting, so you have to play a breakout a little slowly.  In particular, watch out for a bottoming megaphone here that takes out the August 2015 low but then heads up to the channel top.

That kind of bottom would suggest a strong move up is coming, usually to the top of the recent range but at least to 95-96.

The Red and Blue Megaphones on the DX Chart would Usually Mean a Retrace to 95-96 Before a Genuine Breakout Downwards

The Red and Blue Megaphones on the DX Chart would Usually Mean a Retrace to 95-96 Before a Genuine Breakout Downwards

DX has formed a megaphone inside a megaphone within its recent range. That would usually mean a retrace to at least 95-96 before a genuine breakout downwards.