By Hedge Ly
With PMI coming in better than "expected" causing CNBC and the mainstream financial media to become giddy. Oh well, profit from it. We all know how easy it is for this market gap up, not quiet as easy for it to move higher during the session but usually trades higher into the close on days like today.
Now onto the title of the post, Flying Triangles. These triangles in the chart above are ascending triangles, this pattern or triangles started forming as a descending triangle failed yesterday in the last few hours of trading signaling a strong reversal. The futures AH confirmed this with massive volume and a 10 handle rise was here to great us this morning.
IF you look at the candles you can see how the price moves up into the triangle trading sideways with an upward skew until break out. This pattern is very bullish pattern you should have confidence in. You can let a pattern like such as this breath because it repeats/confirms itself multiple times on a longer and shorter time frame, 1 and 5 min. Also on the contrary you can predict a breakdown in trend by the price hugging the lower trend line, slowly pushing down through the line. This is the sell signal. The theory behind this thought is there are so many pattern matching off the shelf trading programs out there which draw line for you and trade off them. These programs can become confused when the price hugs trend lines and a lot of time stop out in error. be aware of this.
Remember in this thin market there are a lot of eye balls watching the same charts, it is a tug of war; and just like tug of war the heaviest (most volume) wins.
