ES is still working on yesterday’s megaphone (red on chart) at the top of its new price channel (navy blue on chart), getting close to the top of its bottoming megaphone (highlighted navy blue line).
The megaphone tells you the market has already run out of steam. There’s too much selling into any buying triggered by technical breakouts or stop-eating for the market to continue moving up. So the market-making bots are swinging the price in a megaphone until they trigger some new action.
Because we’re near the top of the recent trading range, the most likely new action to get triggered is more stop eating.
Update: It’s also possible that the overnight dip is all the retest of the red megaphone VWAP that we’re going to see. In that case, ES could just break out upwards. But I don’t see how it can break out very far upwards with the top of the navy blue megaphone right there. I think the top of this wave will be a crawl between that megaphone top and the price channel top.