Gold Tell

Gold Just Gave a Tell that it's Likely to Keep Megaphoning Across 1250

Gold Just Gave a Tell that it’s Likely to Keep Megaphoning Across 1250

Gold just tagged the bottom of its red rising megaphone and may break the bottom by a bit. That means gold just ruined its chances of forming a proper head and shoulders top inside the red rising megaphone.

That would usually mean gold is settling in for extended megaphoning across 1250, and that would usually mean a triangle is forming (green scenario).

The purple scenario is gold abandoning the red rising megaphone to form a simple or complex head and shoulders top across 1250 for the move up from the December 2016 low.  That would usually set up a crash to the bottom of the big navy blue megaphone.

The purple scenario is unlikely, but if you see it, that crash into the 700s  would be a strong set-up for a fast move to at least the navy blue megaphone VWAP and most likely its top.

Yen Megaphone at Critical Decision Point

Yen is Back at VWAP of its Red Megaphone

Yen is Back at VWAP of its Red Megaphone

Yen futures are back at VWAP of a megaphone right shoulder (red) on a potential inverse head and shoulders.

The yen could slice through VWAP for a trip to the red megaphone bottom (green scenario), reverse here for an upwards breakout from the red megaphone (blue scenario), or start a new megaphone here for a series of megaphones inside megaphones that will ultimately form a triangle (purple scenario).

The purple and green scenarios are the favorites.  If we get the green scenario, it will likely bog down at VWAP after a retest of the January 3 low to morph into the purple scenario.

GDX Inverse H&S Targets at Least 50

GDX Inverse Head and Shoulders

GDX is Forming an Inverse H&S Bottom on the Right Shoulder of an Inverse H&S

GDX is forming a large inverse head and shoulders bottom on its move down from its 2011 high (orange neckline).

Right now it’s working on the right shoulder of the inverse H&S, which appears to be forming an inverse H&S bottom of its own with a likely triangle right shoulder.

GDX could break out through its red neckline for a quick slice through its orange neckline to head straight for its minimum target of 50.  Or it could complete a triangle right shoulder at the red neckline and then a larger triangle right shoulder at the orange neckline before breaking out.

The inverse H&S target of 50 is just above the VWAP of the megaphone top GDX formed between September of 2009 and 2011.  GDX needs a retrace to at least that megaphone VWAP, where it could bog down for years.

Or GDX could put in some kind of fast continuation pattern at VWAP before heading up to new all-time highs.  The purple scenario is a fast slice up through the H&S necklines to a Sornette melt-up set-up at VWAP.

The green scenario is more likely.

ES Flat-Topped Triangle is Now the Fav

ES is Probably Going for a New All-Time High to Redraw its Red Megaphone Top

ES is Probably Going for a New All-Time High to Redraw its Red Megaphone Top

ES is at the top of its navy blue megaphone trying to reach the top of its light blue megaphone inside the orange rising wedge.

Both megaphones require a retrace to VWAP at roughly 2350 to be legal for a breakout upwards, but even if ES goes straight for the red megaphone top, it will need a retrace to the red megaphone VWAP to be legal for a breakout from that.

The green scenario (a flat-topped triangle) is the favorite for now, with the warning that the triangle could fail to complete and ES could go straight for the red megaphone top and through it by roughly the same amount as the March 1 spike to redraw it.

The purple scenario is a gesture to remind you that megaphones inside megaphones can produce all kinds of short-term erratic moves.  Also, at any time we could see a price channel or Sornette melt-up set-up form.

At this point I expect ES to redraw the red megaphone and be stuck in it for a long time.

We could also see ES draw a flat-topped descending-bottom megaphone on the chart.  That would be the purple scenario with another wave down to the formation bottom.