Do you love this rally? Are you ready to throw caution to the wind and plow every last cent into stocks? If your answer is “no”, you’re in good company.
Triangles are all about indecision. And, we’ve got plenty of that. Jumping in at all-time highs feels just plain insane — despite the cheerleading from the boob tube crew.
Yet, there’s a little more upside left — or, so say the harmonics. We just need to break up through this triangle…and then navigate the mine field of harmonic and channel resistance that awaits.
- breaking 1807 and putting the purple pattern out of business
- breaking through the purple channel midline
- getting past the light blue .886 at 1808
- topping 1809.25.
Since the .886 and purple midline are both around 1808, we’ll keep a close eye on things there.
The dollar’s harmonics suggest a sizable drop to 80.06 or so. But, there’s the possibility that this counter wave will extend a little further to the channel top before selling commences.
ES broke up through the triangle top, reached 1807.50, and is currently back-testing. One word of caution: what happened yesterday with the break above the IH&S neckline could happen again.
The 1798 level has attracted a tag twice now. A third tag at the white channel bottom later today (the purple circle) would make for a well-formed flag pattern… and, flush out all the weak bulls sitting in traffic or on a tarmac on the way to Grandma’s, secure in the knowledge that their stops will protect them.
UPDATE: 12:00 PM
DX just tagged a TL connecting the last two tops and the purple channel midline. And, the red .618 is just above at 80.819. A reversal should be close at hand.