It's not anticipated to be a break to the downside Lee, that's why there is a ton of resistance numbers and breakout areas listed on one of those charts all the way up past 1400 <g> and only three to the downside! Those 3 are critical though. In trading the futures, I don't anticipate, I just plan for BOTH ways, so I'm prepared either way, and then I wait for the market to tell me where it's going by taking out either support or resistance levels.
Symmetrical triangles have a 50/50 chance of breaking either way, but tend to break in the direction of the trend.
That's also a Trader Vic style A-B-C (or "W") countertrend move going on that you can see on the 30 and 60 min, which is very powerful but also can go either way. The last few broke out with huge momentum and failed within days, but did give a sharp rally for the nimble who took profits and ran. We had the same pattern the late Feb. into March, which followed through with a week of upside, the first half of May, which followed through with a few days of upside, and the beginning of July, where the "C" failed and never broke out. All three failed in the long run, leading to lower lows, so this pattern's resolution will be very telling. If "C" breaks out, so will the symmetrical triangle to the upside. If 1283 is taken out, you will know the "C" point is breaking out.
You are right, there has no downside follow through YET. In the 4 days since we put in ANOTHER new low. LOL! It's got to at least TRY to consolidate before it makes a move.
But if downside follow through comes, and people did not consider the possibility, it will be tough to escape without damage if long. They happen fast.
I actually think the nasdaq is going to attempt to move up tomorrow am, if there's no bad news out. The comp closed about a point over the 50 EMA 30 on the short covering at the close. If it holds it, we can go higher. If it immediately breaks below, it may be tough. First breaks through EMA resistance fail almost all the time. IF 1260 holds, it will be a sign of strength. A pullback to 1250 if it holds will be ok, but if 1250 goes, there may be trouble. 1234.46, Friday's low, is critical now. A break of that will signal the triangle may be breaking and a break of 1220.93, Thursday's low, will mean run for the hills <g>
To the upside, a break of COMP 1283 (that 50 EMA on the hourly) will signal an attempt on 1300-1315 or higher is on the way.
With all the huge resistance all the way up, we will need one powerful, high volume move to break out of the 1300-1315. But if 1315 gets taken out, then we can make an attept on the tough 1335-50 area, the broken trading range which will be really tough resistance to break back over.
The NQs closed right below the 50 EMA 30, after spiking through at the close. Any move up at all tonight will push it through, and pull in longs who buy EMA breaks and grail buys.
Huge Sellers were sure waiting there though at the close on Friday, ever seen a 7.5 spike up AND down on a one minute bar? It was sold so fast - and on HUGE volume (almost 2000 contracts in one minutes time), I could not believe it as I watched. 300 contracts hit the ask at the high and were immediately sold. I did the fastest 5 pt NQ trade I've ever done on that spike, from 910 to 915, hit the buy button as it blew through the 908 pivot, got filled at 910, hit the sell button at 920 and barely got out at 915 before they brought it right back down at the lightning speed.
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And if they gap it up over the 925 NQ resistance area tomorrow, highly possible if Asia and Europe are strong and cover shorts tonight - we will get a move but it has less chances of lasting if it starts out as a gap and crap through resistance on a Monday morning....
Trading inside of triangles, just like flags is tough long and short, as it's nothing but chop until the breakout occurs, driving both sides nuts. Many futures traders stand aside and wait for the break.
Watch the 50 EMA on the hourly chart at COMPX 1283/NQ 937. That's where the battle will be. As far as right at the open, a break of 1270 will hint to an upside move, and a break of 1250 will hint there is more downside coming...or at least a retest of the Friday lows.
Here's a clearer chart with the critical areas marked and all the spots I mentioned above.
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