The Purple Scenario is a Falling Megaphone Scenario to Put a Larger H&S on the ES Chart
ES has a potential falling megaphone scenario on its 2-minute chart (purple scenario in chart above). This is the most likely scenario because of the blue megaphone on the chart plus a larger head and shoulders on the chart.
Potential ES Head and Shoulders with Neckline at Roughly 2050
Plus, it just seems ridiculous that N:SPY would get all the way down here and not stop to fill the gap at roughly 205.50.
But, as always, the market has an out. There is also a potential flat-topped megaphone on the ES chart (red on chart below) and ES has not yet clearly broken out downwards from it.
These Scenarios are Unlikely Because ES Already has Three Tags on its Blue Megaphone VWAP
If ES heads back to the red flat-topped megaphone top, it could break out upwards on a run of 30ish points, or it could put in a fake breakout and then reverse to take out today’s low.
However, ES has already been rebuffed at the blue megaphone VWAP three times. That’s usually enough to put the price into a breakout downwards from the megaphone.