ES has reentered its light blue megaphone. It’s topping for a drop to the bottom of the red megaphone and a retest of at least the navy blue megaphone VWAP at 2150. If it breaks through 2150 it’s going for the navy megaphone bottom and possibly beyond.
Here’s what the light blue megaphone looks like on the 60-minute chart:
ES could retest the top of its light blue megaphone from inside and then start on a plunge all the way into year 2011 price territory. But since ES is redrawing the red megaphone top, it is likely to spend more time drawing a small top up here before the plunge to the light blue megaphone bottom.
ES could return to the light blue megaphone top again after that but the larger formations make that unlikely.
So, we’re watching for a small top to form up here. It will likely be a small megaphone top that makes you redraw the red megaphone top a couple of times. Then ES is likely to start a move down that’s at least a serious try at the critical decision point at 2150.