Remember the triangle that everybody was talking about back in October? (click to enlarge):
Here is what it looks like now:
Notice that the original geometry established in October is still in force. We are still near the lower line of the triangle, and haven’t been able to push above the downtrend line. We had a false breakdown in November, and a false breakout in January.
Now we are about to exit the apex of the triangle. Here is what the textbook (page 103) says about that:
“the farther out into the apex of the Triangle prices push without bursting its boundaries, the less force or power the pattern seems to have. Instead of building up more pressure, it begins to lose its efficacy after a certain stage. The best moves (up or down) seem to ensue when prices break out decisively at a point somewhere between half and three quarters of the horizontal distance from the base (left-hand end) to the apex. If prices continue to move “sideways” in narrower and narrower fluctuations from day to day after the three quarter mark is passed, they are quite apt to keep right on to the apex and beyond in a dull drift or ripple which leaves the chart analyst completely at sea. The best thing to do in such cases is go away and look for something more promising elsewhere in your chart book.”
So, there you have it. The market has accomplished nothing since October 10th, and is unlikely to accomplish much in the near future.
where’s your quote where you have a gun to your head? you will defenetly use it next post because this bad bank is just an illusion that has already priced in. when real details come out we will sell on news. I honestly hope we keep up until end of day tomorrow so i can sell my ICE. we are getting snow tomorrow anyways no need for ICE although end of year markups might make it a profitable trade after all.
hey Matt,
thanks for all the great posts tonight. Great info all around. Per what you said a few days ago,looks like we’re going to rally, shake out the weak shorts and then retest the lows. You called it again it seems. Futures up nicely around 856 on the spx e-mini.
Matt,
I think technical analysis is a powerful tool, but like any tool, it has it limits.
The current earnings outlook is on a completely different planet compared to what was expected in October. We may get a bounce off this bank noise, but I’m betting (heavily) that it gets sold quickly.
Just for fun:
I am 50% short with DEC & Jun SPY PUTS so I am now just scalping the SPY for fun. After not getting filled at 85.15, I sold @ 85.05 covered at $84.28 in AH then later I sold SPY AH at $85.46. (Better lucky than good)
newbie,
Danny’s blog is here:
http://www.ibankcoin.com/dannyblog/
Matt
Matt,
Thanks for the link. I like your $87.26 target. I have a limit order in at $86.9.
I’m prepared to take some pain on my SPY PUTs, but hopefully we roll over next week and I won’t.