Little Price Channel is Key to What’s Next

ES has Formed a Little Price Channel (Navy Blue) at the Top of its Purple Megaphone and Blue Rising Megaphone

ES has Formed a Little Price Channel (Navy Blue) at the Top of its Purple Megaphone and Blue Rising Megaphone

ES has formed a new little price channel (navy blue) overnight. This price channel is now in the critical decision wave for starting a top vs breaking out into a melt-up.

Since ES just tagged the top of its blue rising megaphone, it’s more likely this channel will start a top. If it does break out into a melt-up, we’ll likely be redrawing that rising megaphone.

Price Channel Melt-Up (Green) vs Topping (Purple)  Scenarios

Price Channel Melt-Up (Green) vs Topping (Purple) Scenarios

If ES does break out into the green melt-up scenario, we’ll be drawing a series of roll-up melt-up channels on the chart that will tell us when the move is ending. ES could easily go for 2400.

If ES begins a top instead, it is likely to be the top before a pullback to 2150.

16 Comments (To enlarge images, right click on image & then click "view image") → Little Price Channel is Key to What’s Next

  1. ewtnewbie

    Yeah, if your goal is to make money consistently, shorting into anything right now without a strong setup is likely futile. However, if you are a swing trader, jumping on board long at this point is like trying to jump on the airplane after it has left the runway. Better to wait for the next one than to chase this one. :-)

    Reply
      1. ewtnewbie

        YW. Post your setups, trade your ideas, and we’ll all learn. My Fib system is useless here, other than “hold on tight to a long” because there haven’t been any new setups to trade with the market just simply extending up, up, up. Other than holding your nose, hitting the BUY button, and then hoping you don’t get steamrolled by calling the top in the wrong way (going long), as you try to hold, hold, hold for a new high. Just my opinion.

        Reply
            1. ewtnewbie

              For example, we just hit the 2299.50-2329 PT, but should have traded 2314.50 to set up that move. Instead, we rallied from 2320 and never looked back. Front running of that magnitude isn’t a setup, it is short covering, panic buying, or insiders with so much confidence that nothing can possibly go wrong that blindly buying ANY dip at all (5 points, really?) is reason to hit the BUY button. That isn’t a setup, that is gambling in my opinion (unless you ARE on the inside and KNOW what is going on, but I don’t).

              Reply
                1. ewtnewbie

                  Now you have a setup to short against that candle high (a few ticks/points above depending upon your bankroll and appetite for risk) as perhaps we are finally reaching exhaustion of this straight up auction. Buyers will move price upwards until sellers shut off the auction. Sellers haven’t stepped in to stall and/or reverse the auction. Sooner or later they will.

                  Reply
  2. ewtnewbie

    Well, that was a “short lived” correction! haha

    Falling MP that is breaking out of the top trendline already with the opening swing low to start, gap fill high, new low, lower high near 2325, and new low. Retrace target is 2326.25 (gap fill, part deaux).

    Gap from yesterday starts at 2318.50 and below, but that hasn’t been sniffed yet. Too funny. UP is the only option…

    Reply

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