Here is a chart that suggests we’re in one giant consolidation pattern that probably won’t play out until 2012 and any move that reaches the boundaries is suspect and likely to reverse. Whichever way it does break, and hold that breakout, should be a nice tradeable move.

Targets:

  • Upside break should go back to 2850.
  • Downside break back to 2350.

3 Responses to “3 Line Break Boundary Lines”

  1. No Tribe Says:

    heh, but likely to head fake the other way first.

  2. abdul Says:

    Nice contraction pattern and after this usually beginning of an expansion. Nasdaq closed at gap’s support and I would probably expect a rebound today if there is positive news out of tech companies. Enter a trade just on expectation and when your setup are all line up but keep your stops because they are there if you are wrong. Cheers.

  3. Don Says:

    On the surface, it’s quite similar to 2007 where it dumped the last week and sold off into March 2008 before putting in a lower high.

    Under the surface, however, there are some interesting divergences developing on TLT, which could mean a break to the upside here instead. I posted about this in my detail today on my site.

    I don’t like to make predictions, so this is just an interesting development. The Euro could keep heading lower while treasuries keep busting higher. That would get pretty ugly if it happens. Hoping for the best, but trading what I see. 🙂

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