As a rule, when you see a triangle form, get out. It is a sign of indecision and will likely result in a break-out. The direction depends, it could be a reversal, or it could be continuation. In many cases, there is a false breakout, gunning positions before reversing.
The key with triangles is to have good trendlines on top and bottom. Watch volume, RSI and stochs. Never act on the first move out of formation, rather let the move test the penetrated trend line again and if it bounces it should do so strongly and regain the high set on the initial break out. Then enter your position.
Also, it is importnant to know your levels around the price action. Today, the key levels 1057 (the low set on the initial down drive) 1061.7 (38% retracement of the opening drive), 1063.02 (50% retracement) and 1064.35 (62% retracement). Also, note the location of key MA's 200, 50, and 20. Look for intersections of the MAs with the key levels. Price action will get turned away near these intersections.
As I am writing this post, an upside breakout attempt has been made, it broke key levels (38%, 50%) but failed to reach 1064.35 on first attempt. Note that the 200 period MA was approaching and likely played a role in the pause. I suspect it will attack that MA again and we may even see an attempt to fill the opening gap. Generally, the 200 MA will push pretty hard on the price action.
Good luck out there!
3 comments:
yeah, covered a bit at 58, reshorted some at 63.5. Otherwise i am going to wait. The fed seemed to respond to the strengthening dollar by buying a s-load of something.
David are you still resolute in your shorts from what seems like so many
points ago ?
Hey Payline,
Yes. I remain fully short with intraday ES trades for income. Will be updating my TA later this evening.
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