Lots of whipsaws today, right? That’s what the market does before it makes a big move. It loves to thrash both longs and shorts until they are both exhausted, and then gap way up or down the next day so that daytraders can’t make any money.
So, which way will it break? While the market has been defying my bearish charts, this is going to be the one to beat it down. This is a 5-minute chart of SPY over the past two days (click to enlarge):
This symmetrical triangle is a neutral pattern, but since it is occurring after an extended buying frenzy, I’m thinking that it will break to the downside. Let’s see if it develops like George’s Triangle did at the swing-high back in October:
The McClellan Oscillator is way up in the clouds. That doesn’t mean that the market will pull back; but it does tell us to be on our toes for a pullback.
