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1) Note 3 point hit along lower trendline.
2) Note that the two bars on the 3rd hit did not reverse strongly once the
line was penetrated ... this is a sign that any rally may not have strong
sponsorship. Odds therefore do not favor buying the reversal near the lows.
3) Note the 3rd hit along the upper trendline ... this is the one which
should takeoff through the line and not retrace much more than half the
distance to the 3rd hit on the lower line. If the reversal off the lower
trendline is strong, the retracement can be a good entry point.
4) Note that price is getting closer to the apex of the triangle. This is
generally a sign of either weakness or indecision. Odds favor at least a
modest failure which will require a redraw of the lower trendline. Failures
further from the apex are often tradable.
5) The triangle failed just a bar or two shy of the apex .... look for a new
triangle.
6) ES02Wedge is a reincarnation. There are two possible trades here. Either
price breaks down and reverses quickly strongly (having cleared the stops)
or price retraces reluctantly to the broken lower trendline where it may be
shorted.
Finally, these screen shots were taken during the "dead zone" ... roughly
10:30-11:30/12:00 mountain time. This is a time when the monkey's are in
charge of the zoo. Triangles often develop during mid-session consolidation
... they should not be traded unless you have exceptionally high confidence
in the pattern.
Earl
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