Short Term trend is now bullish

The aggressive strategy (1):

Entry: Take a long position at the third contact with the support
Stop: The stop is placed below the last lowest
Target: Opposite band of the triangle
Advantage: The amplitude of the movement will be important in case of rebound towards the opposite band. The risk is low
Disadvantage: Downward breakouts are more frequent

The aggressive strategy (2):
Entry: Take a short position at the third contact with the resistance
Stop: The stop is placed above the last highest
Target: Opposite band of the triangle
Advantage: Downward breakouts are more frequent

http://www.forex-tribe.com/Ascending-Broadening-Right-Angle.php

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The market gapped down today in the cash market but still remained in the triangle pattern as it failed to make a lower low. The test of the 1597-1601 area that I was hoping for did not come in regular trading hours but again in pre-market trading and the pattern it left is actually more bullish than the triangle in the cash market. So I put up a chart of the ES trading for the last few days so you can see what I am talking about as the cash market chart show only one test of support. The pattern is a right angled triangle with three bearish attempts to break the equivalent of the 1597-1601 low, so given the fact this last attempt could not break support there is now a good chance for the market to close the 1626-30 gap as soon as Friday. Also, the short term trend has now turned bullish and the daily MACD has officially done a bullish cross so unless there's some sort of negative surprise in the next day or two, the path of least resistance is up. We will get the jobs report on Friday and that could be used as an excuse to rally as a weak jobs number could be interpreted as more QE and a strong jobs number as a sign of the economy picking up, a win/win situation as far as using an excuse to move the market.

I ended up position trading my FXI position for some improvement and perhaps I'll get a chance to trade again on Friday if I see a good set up.

Have a happy and safe 4th of July!

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Neutral

Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.