IWM is back at its red megaphone top after confirming the navy blue rising megaphone. Now it needs to put in a topping formation before a dip to at least the red megaphone VWAP and possibly the red megaphone bottom.
A fast top here would make the purple scenario more likely. That represents strong buying at the red megaphone VWAP to move IWM to another new all-time high that would be the head of a head and shoulders top for the navy blue rising megaphone.
If IWM breaks out of the navy rising megaphone and its H&S top at the same time, it’s a favorite to make a fast correction to the navy rising megaphone bottom.
A move through the red megaphone top to put in a prolonged topping process would make the green scenario more likely. This faster crash to the red megaphone bottom would set up the silver rising megaphone and another move to the red megaphone top.