Virtually every trader who uses charts has seen the recent symmetrical triangle forming in the major US Stock Market Indexes. Did we get a break-out buy signal today?

From the chart (and zoomed in image), it would seem that indeed we did have a triangle breakout buy signal today, but notice that it was not confirmed with higher volume (yet).

Notice also that there is key resistance overhead via the 50 period moving average, which is approximately 100 points away.

One thing to note is that almost everyone sees this triangle, and I assume that a majority would assume that the resolution would be to the downside. As such, there are likely to be stop-loss orders (to buy to cover) above the upper trendline, which were triggered today. Traders, anticipating a downside break, may have already entered short, only to have their positions currently underwater.

I’d like to see price cross the 50 period moving average on higher volume before getting super-bullish.

Until then, let’s wait for the market to tip its hand one way or the other before positioning ourselves too aggressively.