IWM is Poking at Important Lines

The Pink Rising Megaphone Means IWM Needs to Get Cracking

IWM is Picking at Its Red Megaphone Top and the Bottom of its Big Light Blue Rising Megaphone

IWM is Picking at Its Red Megaphone Top and the Bottom of its Big Light Blue Rising Megaphone

IWM is still trying to work its way back to the bottom of the pink rising megaphone within its multi-year red megaphone and navy blue rising megaphone.

It’s picking at its red megaphone top and the bottom of its old light-blue megaphone as it works on what’s like the head of a head and shoulders top for the pink rising megaphone.

As always for a rising megaphone top, timing is important for the pink rising megaphone.  Rising megaphones provide great short set-ups when they top with a head and shoulders that breaks out at the same time as the price breaks out through the rising megaphone bottom.

That means IWM needs to get cracking on a trip to the pink rising megaphone bottom, put in a right shoulder bounce, and break out. Otherwise it’s either going higher (light blue scenario) or it’s going to drag out this top some other way.

The H&S Scenario vs the Megaphone Crash Scenario

After IWM finally completes a top for the pink rising megaphone, it’s going for at least the red megaphone VWAP (green scenario) and possibly its bottom (purple scenario).

A trip to the red megaphone bottom would set up a melt-up to the megaphone top.  A reversal at the red megaphone VWAP would set up at least a move into the head of a head and shoulders top for the navy blue rising megaphone, and possibly a genuine breakout from the red megaphone in an extension of the navy blue rising megaphone.

The Sornette Bubble Blow-Off Top Set-Up

An IWM stab at the red megaphone VWAP that doesn’t get all the way to VWAP would start my adrenaline pumping.  A hard reversal above VWAP and a second attempt at selling near the red megaphone top that ends up breaking out upwards would confirm a monster Sornette melt-up set-up on the daily, weekly and monthly charts (orange scenario).

We’d be looking at a target near 200ish and IWM could go much higher.  The move would be very fast.

You could even make a case that IWM has just put in in the second bobble of a Sornette melt-up set-up and is breaking out of it right now.  A Sornette melt-up set-up is essentially a megaphone that breaks out without a retrace to VWAP.  Instead it puts in two smaller pullbacks (bobbles) as the megaphone breaks out.

That’s less likely because the first pullback was so low (the pullback into the October 2016 low) and because of the extended bog-down at the red megaphone top, which began last December.  Usually the second bobble of a Sornette melt-up set-up is faster than the first.  The idea is that the move should be gaining speed, not losing it.

IWM Megaphone Update

IWM Megaphone

IWM is Still Neatly Turning at the Top of its Red Megaphone & Needs a Retrace to at Least VWAP at 113

IWM is getting closer to the bottom or right side of its pink rising megaphone and that means we’re likely closing in on the dip or correction we’ve been waiting for.

IWM could put in a swoosh to its little light blue megaphone bottom any time, then put in a triangle right shoulder for a head and shoulders top before a breakout from the pink rising megaphone to at least its bottom near the red megaphone VWAP.

IWM has been turning neatly at its big red megaphone top.  It could still break through that top in the purple scenario, which would greatly raise the odds of a trip to the red megaphone bottom.

The green scenario, which is a Sornette bubble set-up, is a set-up for a melt-up to close to 200.  The light blue scenario, a Sornette set-up failure, would set up a crash to roughly 60.  The purple and orange scenarios could keep IWM in the red megaphone for a very long time.

Neely is looking for a crash or blow-off top before a crash.

IWM Megaphone Update

IWM Looks Like it will Put in the Rest of the Leg Down to its Bright Blue Megaphone Bottom

IWM Looks Like it will Put in the Rest of the Leg Down to its Bright Blue Megaphone Bottom

ES pushed a feeler through the top of the megaphone it’s been forming for a year (see yesterday’s post) but without really breaking out through the top.

And IWM looks like it’s going to continue down to the bottom of its bright blue topping megaphone, suggesting ES may have another leg down coming too.

IWM is closing in on the bottom of its pink rising megaphone, which means we’re getting close to a breakdown to at least the red megaphone VWAP.  The IWM top before that move could even already be in.

IWM could go all the way for its red megaphone bottom on this dip, but if it does it’s a strong favorite to make another trip to its top after.

And this blue topping megaphone, with its precise reverses on the red megaphone top, increases the odds of a reversal at or near the red megaphone VWAP for a breakout upwards into a 50-point melt-up.

IWM Technical Top vs Passionate Top

Crashes Don’t Start on Technical Trading

IWM Keeps Reversing on Exact Touches of its Red Megaphone Top

IWM Keeps Reversing on Exact Touches of its Red Megaphone Top

IWM keeps reversing on exact touches of its 3 1/2 year red megaphone top. It could do that all the way to a breakout from the pink rising megaphone.

If it does, the green or blue scenarios become the favorite.  Great crashes don’t start on exact reversals from important lines.

If IWM can break through the red megaphone top by enough to form a topping pattern up there, it becomes a favorite to go all the way for the red megaphone bottom after it completes a top and breaks out of the pink rising megaphone.

Potential Set-Up for One of the Great Bull Markets of All Time

Note that the green scenario’s reversal at the red megaphone VWAP would lead to either a second trip to the red megaphone top before a crash to its bottom, or a genuine breakout from the red megaphone (blue scenario) with a technical target of at least 200, and the breakout could lead into one of the great bull markets (or bubbles) of all time.

The blue scenario would essentially convert the red megaphone into a giant Sornette melt-up set-up.

I posted a few days ago that Neely is looking for a market crash.  When you have a set-up for a crash, and the market won’t crash, that’s a great set-up for a melt-up.