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Today’s Trading Plan: The Looming Triangle

Tuesday, October 11, 2016 5:43
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Technical Outlook:

  • S&P 500 (SPX) managed to put together another bounce back rally that was quite simply meaningless in terms of accomplishing anything technically. stock market triangle topping pattern october black monday 1987
  • The declining trend-line from the August highs was tested yesterday and saw a rejection in price with SPX retracing 40% of its gains on the day. 
  • Despite breaking it early on, once again the 50-day moving average was unable to see price close above it. 
  • Volume on SPDRs S&P 500 (SPY) rally yesterday failed to provide a good reading, coming in at the lowest since August 15th and at levels seen during a half day of trading on Christmas Eve. 
  • Rising trend-line off of the February lows are in view again with current support at 2147. Break it, then the next two support levels are 2144 and 2120. 
  • Taking the declining and rising trend-lines already mentioned already, you have a triangle that is forming near the highs of SPX. Typically these triangles, at this location, typically results in topping patterns that end badly for the bulls. 
  • Crude (/CL) made a big move yesterday on rumors Russia is willing to freeze or possibly cut production, causing oil to spike 3%. Now it is setting up for a move back to the June highs. 
  • Nasdaq (COMPQ) is the strongest index by far right now and it had a great opportunityh to establish new all-time highs, but fell short by 2 points. 
  • Despite the rally yesterday, the CBOE Market Volatility Index (VIX) barely saw a drop yesterday. 
  • Price action on SPX 30 minute chart is absolutely unintelligible over the last 2 weeks. Simply chop-city. It does fall in nicely with the triangle pattern over the past month. 

My Trades:

Read more…

Ryan Mallory is the co-founder of SharePlanner Inc, a financial website devoted to Day-Trading, Swing-Trading (both long & short) and exchange-traded funds. Ryan makes a strong emphasis on risk mitigation strategies, trading transparency, and trader education – not to mention a great set of stock screens as well.

Be Sure to Check out Ryan’s Site at


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