Last post called for sideways corrective action between 1181-1154. Although the range was smaller, we did go sideways. This action is beginning to look like a Triangle in the making (my favourite kind of pattern), and we may be setting up for a push higher late this week or next.
The above hourly chart, shows prices testing & remaining above the maroon uptrendline. This increases its importance, in case of any future break of this line.
Triangle to the rescue
When prices didn't break down in the last session, the immediate suspicion was a triangle. And volume's dropping off too. Notice, how legs A & B are in 3-waves. If you remember the Ellliott Triangle, there's 5 legs A-B-C-D-E, and each leg is a 3-waver. Is leg C done? Possible, as shown by the light pink trendline, forming an ascending triangle. However, for a symmetrical triangle, we could drop down towards the tentative purple trendline to end the C(remaining within range of the maroon uptrendline). Ideally, there would be small D & E waves, before a thrust up. At the moment, looking at a target of around 1195
Depending on whether wave C is done, or in the making, the thrust up could be as soon as next couple of sessions or next week. In any case, these setups are high probability events, and not 100% guaranteed. The Market doeth as it pleaseth! A break below SPX 1161 invalidates the above pattern.
Always glad to spot a triangle, as they are relatively easy to identify, and have a higher probability outcome than most. A triangle here would definitely reduce some confusion.
For other support levels, refer to previous post. All the best folks!
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