Thursday, November 17, 2011

Dow May Be In Wave (c) Of Triangle

The form of the triangle in the Dow Industrials and the YM is different than for the SP500 and the ES with the recent high on 11/13 higher than the high on 11/8. This suggests that the triangle may have much further to go and that it will remain intact as long as the 11/1 low is not violated.

Triangles can often break out in either direction.  Unfortunately, for the short-term case, if the market does not break out to the upside by early December, we will have to be on guard for a downside resolution.  This will ultimately prove to be bullish, but the bullish outcome will be pushed out toward the end of the year and early January.

There's nothing to do here but be patient.  The Dollar does not look like it is going to break out to the upside, at least for now, so the bullish bias remains.

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