Back in the old days, we used to call the pattern currently evident on the hourly chart of the ES (S&P Futures), Broadening Tops. Not any more. Now they are popularly known as megaphones. In recent years, they have always broken out to the upside.
Frequently the ensuing move is equal to or greater than the height of the pattern at the breakout point. In this case that would be 280 points. If the breakout were to happen today, the breakout point would be around 4815.
Do the math. I can’t count that high. However, I will say that my Technical Trader reports as far back as last July. So I can rule it out.
Here at the Stool, we’re interested only in day trading matters. In that vein, the 5 day blowoff move from the latest V bottom seems to have subsided. That 4815 around the time that New York opens is a massively important resistance level. I say to you bears, if that line is crossed, abandon hope, all ye who enter here.
Bulls, enjoy the party. It will probably be your last.
And bears, don’t even think about downside unless you see 4778 busted. Then you can think about it. Acting on it is something else. There are two support lines coming up below that. One is at 4776. The next is around 4760. Both are rising through the day today. We’ll keep an eye on them.
Meanwhile, the big picture.
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