We mentioned the broadening megaphone/wedge pattern in the morning report and how it tends to lead to shakeouts before resumption of the up trend.  We would need a material move below yesterday’s low of 1126.25 to confirm that this pattern has reasserted, so it’s too early to tell if today is part of it, or if the ES will return to highs again before the real shakeout occurs.  However, we did mention the similarities between now and the October earnings season.  In fact, the similarities have only increased because there is now a 3 consecutive day large range reversal pattern, just as there was in October.  Given the lack of volume support down to 1109.00 in the ES, swing longs should pay heightened attention to yesterday’s 1126.25 low.

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