Dollar is Approaching Top of Flat-Topped Megaphone

DX is Approaching the Top of its Red Flat-Topped Megaphone

DX is Approaching the Top of its Red Flat-Topped Megaphone

The dollar is approaching the top of its flat-topped megaphone (red).  It’s approaching the top within a rising megaphone (blue) that should top with a head and shoulders that breaks out at the same time as the rising megaphone breakout.

The dollar is then a favorite to return to the bottom of its flat-topped megaphone before a try at a breakout through the top that could move a long way.

That breakout can fail with a small quick pierce.  A breakout failure of this type would target a new low within the flat-topped megaphone (purple scenario).

Or the dollar could fail to return to the red megaphone top and break out downwards after a bounce (pink scenario).

Legal for Breakout or Could Keep Triangling

Megaphones in Triangle

The Navy Blue Triangle and All Megaphones Inside It are Legal for Breakout Downwards

ES has completed a triangle that is legal for breakout downwards (green scenario), and so are all the megaphones that comprise it.

But there are irregularities in this triangle that make it a favorite to keep triangling a while longer (purple scenario).

If ES keeps triangling, it can break out in either direction, although an upwards breakout would be a favorite to get turned back at 2184.

ES is still a favorite to see 2080 (and likely 2050) again before a breakout to any significant new high and if it gets through 2050 it’s a favorit to retest the January/February lows.

Gold Crash vs Triangle

Gold Long-Term Megaphones

Gold Long-Term Megaphones – Crash to New Low vs Triangle Scenario

Gold has corrected to close to the VWAP of its long-term blue megaphone. It needs to retest the top of its orange megaphone from inside.  Gold could megaphone its way down to the blue megaphone VWAP before that bounce or it could put in that retest from here.

Gold’s minimum target for this pullback is the orange megaphone VWAP.  Gold could reverse there for an upwards breakout from the large potential inverse H&S on the chart.  But that’s an unlikely scenario.

Gold could also break down through both its orange and blue megaphone VWAPs to crash straight down to a new low (green scenario).  That kind of crash would set up a melt-up to the blue megaphone top and likely an upwards breakout from the blue megaphone after a pullback from there.  If you’re interested in buying and holding gold, you’d want to buy any crash to a new low.

But the most likely scenario is the purple one.  That represents gold starting a series of megaphones inside megaphones across its blue and orange megaphone VWAPs.  The retest of the December 2015 low would get bought, and gold would spend a year or more forming a triangle before ultimately breaking out to a new low in the 700s.

Gold Inverse H&S vs Megaphone Bottom on 60-Minute Chart

Gold Inverse H&S vs Megaphone Bottom on 60-Minute Chart

Right now gold is trying to complete a bottom on the 60-minute chart for a bounce to 1325ish for a retest of some megaphone VWAPS and the inside of the orange megaphone top.

There’s a potential inverse H&S on the chart, but gold has failed to make a clean breakout from it. It could still be forming a triangle right shoulder before a clean breakout (purple scenario). Or it could be forming a megaphone right shoulder to transform the inverse H&S into a megaphone bottom (green scenario).

AAPL Triangle vs Megaphone Right Shoulder

AAPL Needs to Retest the Bottom of its Purple Rising Megaphone

AAPL Needs to Retest the Bottom of its Purple Rising Megaphone

AAPL is trying to form a top on its purple rising megaphone.  But instead of forming a clean head and shoulders and breaking down, it has started megaphoning near the bottom of the rising megaphone.

AAPL needs to retest the bottom of the purple rising megaphone soon.  If it bounces off the formation bottom, it’s likely forming a triangle right shoulder on the potential H&S top.  A triangle right shoulder would usually mean a downwards breakout is coming for a big drop.

If instead AAPL breaks out a little through the bottom, then reenters the formation, it’s forming a megaphone right shoulder on the H&S and that would usually mean a squeaker new high that would be the head of a new larger H&S or megaphone top.

The purple scenario is the favorite and could keep AAPL moving sideways for years.

IWM Breakout

IWM has Broken Through the Neckline of its Blue Flat-Bottomed Megaphone

IWM has Broken Through the Neckline of its Blue Flat-Bottomed Megaphone

IWM has broken through the neckline of its blue flat-bottomed megaphone.

If it recrosses that neckline immediately, it’s a favorite to return to the formation high or a little higher.

If it continues with the breakout, it’s a favorite to return to the neckline of the pink flat-bottomed megaphone near VWAP of its 3-year megaphone (red).

If IWM gets bogged down in a new megaphone in that area, it’s likely morphing the red megaphone into a diamond.  Another way of looking at it is that IWM is likely to put a triangle right shoulder on the H&S on the daily and weekly charts.

IWM could also just slice right through the red megaphone VWAP and neckline of the pink flat-bottomed megaphone to set up a crash out of the red topping megaphone.  In that case, we’re likely to see a price channel melt-down set-up trigger near VWAP.

The green scenario is about a 2 to 1 favorite.

How Long Can a Triangle Last?

ES Continues Working on Megaphones within a Triangle

ES Continues Working on Megaphones within a Triangle

ES continues forming megaphones within a triangle. The triangle has a complete triangle inside it.

If the triangle breaks out upwards, ES is a favorite to get turned back at 2184 for a trip to at least 2080 and likely 2050.

If the triangle breaks out downwards, it’s headed to at least those targets, but you have to watch for a price channel crash set-up for a trip back to the January/February lows.

 

Still Working on Triangle

Green Scenario is the Favorite

Green Scenario is the Favorite

ES is still forming triangles and megaphones within triangles. It’s likely forming a largish continuation triangle that will break out downwards to at least 2080 and probably 2050.

The purple scenario represents a triangle breakout to 2184 to be followed by a move to the bottom of the orange flat-topped megaphone.  In that scenario, ES would be a strong favorite to return to 2184 after the next trip to the formation bottom, but the formation could break out in either direction.

If ES breaks down through 2050 in either scenario, it’s going for a retest of the January/February lows.