There’s a clear triangle on the ES chart, and normally after an exact touch on the triangle top the price wouldn’t break out the triangle bottom without another move to the top. And that move would usually pierce the top.
But the triangle top did get pierced today on the SPY daily chart.
And if the market closes tomorrow with SPY and ES near the triangle bottom, the SPY put-call ratio might be so high that the price just keeps on crashing.
If a major move gets started during options expiration week, there tends to be a lot of chasing and unwinding of complex hedges and the move can get a lot bigger a lot faster than it would have gotten outside of opex week.
If you see ES break out of its rising wedge, I’d short and be prepared to stay short if we don’t get a proper bottom at the target areas. There are a lot of megaphones on the chart, and people are never looking for megaphones. They’re always looking for head and shoulders patterns.
In particular, if ES gets moving through a critical megaphone VWAP at 2016.50, the next target is 1950 or even straight to 1900.
I’m not saying it’s going to happen. I’m saying it’s a great time to be on high alert.