The weekly chart on the ES is in the process of forming a possible megaphone pattern which might indicate a possible topping of the US stock market once 4 has completed. Most traders know that from Jan 2018 through Nov 2020 the ES was in a very large megaphone pattern until Dec 2020 when it broke out to the upside of this pattern
The reason I say this might indicate a possible topping is because we truly need to "hold" that orange non-horizontal trend line...we do NOT want decisively break through that line and get back into the 2018-2020 megaphone. As you can see from my range boxes, 5 ends below the orange line. Since the last megaphone ended breaking to the upside...does this megaphone end by breaking to the downside? Only time will tell but it's worth watching the weekly for clues! (It should also be noted that this megaphone is a bit steeper because it's forming in a shorter period of time.)
I also think the ES re-tracement on this leg (2-3) will not touch the .382 re-tracement from the Covid lows which is 3,802...my reasoning is twofold. 1. It will set up a very bullish upswing on leg 3-4 which will make a new ATH in the next 2-4 months. 2. The symmetry of the range boxes show the lower end of the range box around 3975-4040.
I've been watching the expanding triangle form ( aka ...megaphone) on the NQ since Dec and if you read my last post you know that next week is a very important week for the Indices IMO as I think we might see a turn in the markets next week based upon time.
The reason I say this might indicate a possible topping is because we truly need to "hold" that orange non-horizontal trend line...we do NOT want decisively break through that line and get back into the 2018-2020 megaphone. As you can see from my range boxes, 5 ends below the orange line. Since the last megaphone ended breaking to the upside...does this megaphone end by breaking to the downside? Only time will tell but it's worth watching the weekly for clues! (It should also be noted that this megaphone is a bit steeper because it's forming in a shorter period of time.)
I also think the ES re-tracement on this leg (2-3) will not touch the .382 re-tracement from the Covid lows which is 3,802...my reasoning is twofold. 1. It will set up a very bullish upswing on leg 3-4 which will make a new ATH in the next 2-4 months. 2. The symmetry of the range boxes show the lower end of the range box around 3975-4040.
I've been watching the expanding triangle form ( aka ...megaphone) on the NQ since Dec and if you read my last post you know that next week is a very important week for the Indices IMO as I think we might see a turn in the markets next week based upon time.
Comment:
This is playing out just as I imagined...looking to see a flush below the Feb 24th lows before I start to think about BTD. My buy zone will be formed by watching the VIX...I'd love to see the VIX 45-55 this week.
Comment:
This was playing out as I imagined on Monday, March 14 but my targets on price & VIX did not play out. Not 100% confident we've reached a bottom however if we have the ES must continue in "UP" mode. The ES is the only index whereby the death cross has been saved. IMO we need to keep the uptrend going as a bearish daily closing below the 200 EMA on the ES could quickly reverse this uptrend and waterwall downwards to create the cross. Keep you SL's within reach and don't bag hold if we start to reverse course!
Comment:
I was hopeful this was playing out but the candle close in the ES on April 5th negated this thesis. I'm now in bear mode after last weeks action.