Please look at this blog as I only copied a teaser out of respect to the author. It is filled with good information and can always be found on the Blog List. Thanks Shaza for bring this one to out attention. Do you remember where you where on 9/11/2001? I am sure you do. I had just started with a company called Hewitt Associates and they closed and sent everyone home.
Take a moment of silence for the dead at The Twin Towers, the Pentagon and in the fields of Pennsylvania. Regardless of you opinion as to how this happened (and I buy the official position) This was our Pearl Harbor. Also God Bless our Troops in the field and may Obama bring them home before Christmas. QB
Sep 10, 2010: 5:44 PM CST
Sep 10, 2010: 5:44 PM CST
Have you seen the triangle pattern that’s been forming over the last few days in the S&P 500 or SPY?
If not, let’s take a few chart glances at the pattern, explain what it means, and what we can expect in the week ahead from the pattern.
First, the pure price glimpse at the ascending triangle:
Ascending triangles form when price ’smacks’ into an overhead resistance level, but as that level holds, price forms a series of higher lows in the context of a rising trendline.
That’s what we’re seeing in the SPY, with the upper resistance level at the $111.50. Over the last few days, price respected a clear rising trendline that currently ends at the $111.40 level.
So, one of those two trendlines is about to break… or stated differently, price is about to break through one of those trendlines.
According to the Price Alternation Principle, price alternates between periods of range contraction (like triangles) and range expansion (like breakout moves).
Given that we’ve currently formed a clear price compression pattern, odds favor a range expansion breakout move to occur soon. Or at least that’s what the principle states.
Officially, we can’t predict with 100% certainty which direction price will break, but we can anticipate a potential big breakout move one way or the other.
We can, however, look at other indicators and higher timeframes to assess the odds of an upside or downside break.
For the entire article and lots of charts go to: http://blog.afraidtotrade.com/