Looks like we broke up out of that triangle and have now fueled a short covering rally as we are also back inside the wedge boundary.
Below is a TOS chart showing an interesting diamond formation on the DOW (/YM), and the S&P (/ES). Note how we entered from below and broke higher. The move higher should mirror the move into it. Diamond formations are EITHER continuation patterns OR reversal patterns. This and the earlier triangle pattern look to be targeting the 890 area. We’ll see, I’m back to being more neutral here as I can still see it both ways. The bullish wave ‘B’ forces are fighting strongly against the realities of the underlying fundamentals.
When you step back and look at the bigger picture, we are just moving sideways and have been since October 10th. In fact, we’re in the exact range of that day now. The only real difference, market wise, is that now we have worked off a great deal of the oversold condition that existed then. Meanwhile the bond market has continued to show a flight to safety. Certainly interesting times!
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