ACH on Feb14: Correction over?

3 hour ES chart

The market has already corrected almost 20 points on the daily chart and the short term (chart above) looks bullish with a cup & handle forming (blue) and a break out of a triangle(red). So here are my hypotheses:

H1 - the correction is over and the market has started rising again;
H2 - a bigger correction has just started and a top is forming around these levels.


Evidence:


E1 - the 5 d ema of the put/call ratio is suggesting the market is/was oversold;
E2- the NYHL (52 Week New Highs - Lows) has already retraced to levels that market higher lows in past uptrends;
E3 - the short term market action is bullish with a break out of a triangle taking place;
E4 - the market has risen a lot on the weekly chart and it could at least consolidate for a longer time.


Matrix:

	E1	E2	E3	E4	Total negations
H1	+	+	+	-0.5	-0.5
H2	-0.5	-0.5	-1	+	-2

Conclusion:


H1 wins. It is important to note that mainly the shorter term action is tilting the balance towards this hypothesis. Thus, a trade on the long side will not be justified if the short term weakens (for example, the break-out attempt fails).