hehe
p.s. now he might.
Dow About to Break Out?
- Thread starter Corso482
- Start date
p.s. now he might.
Given that everybody's been watching the "H&S" patterns shape up in the major indices and that everybody's been watching the November and December resistances, there are a number of opportunities for game-playing here. For the most part, however, trading seems very apathetic.
It's possible that a breakout might cause a short squeeze among those who have been placing great importance on these resistances. But how long it would last or how far it would go is anybody's guess. It's also possible that any breakout would be used as a trap, and that it might create an opportunity for serious distribution.
Rather than try to predict these outcomes, I settle for assigning probabilities to them. Right now, it looks near 50/50 to me, though I'd love to hear other opinions.
--Db
As far as triangle/wedge patterns go, I really don't use the pattern itself to predict direction. To me they all simply mean that volatility has dropped and there will probably be a move to come soon, like another poster said. As far as the pattern I've been posting about, I only think that it will probably result in an upside breakout because I'm bullish on the market right now. But mostly I'm posting about this pattern for fun and to get feedback from others. I wouldn't bet the farm on it.
Quote from dbphoenix:
So I assume you aren't working toward eliminating bias from your analyses . . .
--Db
My swing trading system first establishes either a bullish or bearish bias for the Dow, then selects longs or shorts accordingly. I don't actually trade the Dow itself, so it doesn't really matter what happens with this triangle pattern. Anyway, if the Dow really broke down my bias would then switch to bearish and i would take up short positions. Oh, and in case you were wondering, I'm only paper trading this system for now.