SPDR S&P 500 (NYSE:SPY) Price Channel in Rising Megaphone at Top of Larger Price Channel
Yesterday I posted a likely rising megaphone topping pattern (orange on chart above) on a year-long SPY price channel.
Today I wanted to show you a smaller price channel (orange) along the bottom of that orange rising megaphone.
SPY broke the top of that little price channel on June 2 in the channel’s critical decision wave, where the price decides whether to break out into a melt-up or start a top. SPY then put in a nice partial pullback into the channel.
Today SPY is poking through the channel top again. This is where the melt-up set-up (green scenario) lives or dies.
SPY has to either get going screaming higher–and pronto–or it’s electing to form a channel top (purple or blue scenario). The blue scenario should have been connected to the first purple wave down, not the second. SPY could also form a rising megaphone or rising wedge for the little channel top.
Whatever little top the channel forms, it should also in the end work out to a head and shoulders top on the orange rising megaphone.