Triangles Developing on the Indexes
As the formation of triangles is typically considered to be a continuation/consolidation pattern, the easy assumption is that these will be resolved to the downside. However, my gut is bullish, and so I’m hoping they will breakout to the upside.
[[DIA]]
Note the MACD trying to cross, and the volume decreasing as the pattern develops. A break above the triangle with a run to the 50 day average would yield a healthy profit for a long trade.
[[SPY]] Same analysis as on the Diamonds.
Some technicians may choose to draw their support and resistance lines through the real bodies of the candles rather than just the tails. This would produce a tighter triangle. When drawing these lines, I prefer to stay consistent, and so I almost always draw then through the intraday highs and lows.
[[QQQQ]]
The Qs have not formed a very discernable triangle. The MACD has crossed above the zero line.
All these charts show that should a rally finally take hold, there is an easy 10 points worth of profit before resistance becomes an issue.
fun facts about triangles:
1.) they are frequently fail — could turn into a flag or a pennant
2.) they work best at lows, rather than the middle or highs of price range
3.) they break ~70% of the way to the apex of the triangle
4.) 4 consecutive down bars, with the fourth down bar being the one that breaks the rising bottom trendline have the highest chance of following the pattern through to the downside
5.) volume must increase noticeable on the breakout bar.
October 21st, 2008 at 10:08 pmbtw, I recognize that “they are frequently fail” is in itself a “fail”
fuckin’ edit function.
October 21st, 2008 at 10:09 pmWood
When you say “your gut”, it makes me wonder about your overall health. Im concerened that you might not be getting enough exercise/cardio? Hows your diet?
Last question (but an important one):
You have to answer these questions with eihter The Fly, Ragin,Alpha,Danny,Gio,and Adam
Its kind of a “fuck,marry,kill” type of game.
1. You have to beat the living shit out of one of the guys, who would it be?
2. You have to hook up with one of their wife,fiance, or girlfriend, who would it be?
3. You have to kick one of them off ibank for good. Who would it be?
October 21st, 2008 at 10:30 pm^ fail.
October 21st, 2008 at 11:37 pmJust my opinion. I think it will break to the downside, but as of yet I’m not betting heavily on it. I actually have more longs than shorts, and my current shorts are not necessarily short term trades. But I will probably exit them when we make some new lows.
If I throw my nuts on the fire it will be after I see a little confirmation.
October 21st, 2008 at 11:50 pmThe way I have the triangle and important support configured in my mind, only short if we a.) break the week low of 943,
October 22nd, 2008 at 12:03 amb.) break 900
Well there goes my PG post. Beat me to it Wood.
Financials - SKF, XLF, UYG (see RC) - also showing similar patterns (slightly extended, maybe) on both 20 & 60-day charts.
See also: MON
October 22nd, 2008 at 12:28 amI just have to play this market day by day, but one thing for sure is AAPL is up 13% in AH. WED will turn into a market led QQQQ rally. I predict QQQQ will finish green on WED.
October 22nd, 2008 at 4:05 amSorry AN Mike, not gonna do it.
Sorry DPeezy for stealing your thunder!!!
Zee, we’ll see. At 6:52 a.m., I have Nasdaq futures down -1%.
October 22nd, 2008 at 6:53 amIt was worth a shot…..thanks anyway Wood.
October 22nd, 2008 at 6:58 am