S&P in a triangular set up
This picture (see chart below) says it all. But first an explanation. what is shown is a symmetric triangle ( > ) with very acute angles. We build it when we see the high and lows start to match up in this pattern. The vertical line at the start of the triangle, which is determined mainly by practice and experience, show us the amount in points that the triangle is valued at, in this case 55 or about 5.5%. At the end, when the break occurs it is to break the boundaries of the triangle either up or downwards for the length equal to the value (price height) of the triangle itself (in this case 55). As you all see on the vertical line in the right hand side the break was as expected. We count the break from the beginning of the green (+) candlestick that break the triangular pattern. In this case the break was almost perfect, hitting the +55 from its’ break almost dead right at 1110.
This is a fine and classic triangle scenario. They happen often, more than any other pattern of Technical Analysis so it is worth looking out for them. Don’t forget, play it safe and buy or sell short on break!
Here is the way the Chart looks:
