The End is Near for Symmetrical Triangle in SP500

Sep 11, 2015: 12:10 PM CST

“The End is Near!”  For the ongoing Triangle Pattern in the S&P 500 right now at least.

We’ve successfully traded the “Ping-Pong” action between these levels but now it’s time to prepare for a likely breakout and new impulse swing in the market.

Which way?  And exactly what are the levels?  Let’s take a look!

As I’ve been highlighting each evening to members, the S&P 500 (broader market) continued to trade within a compressing trendline environment which we can draw as a “Symmetrical Triangle” Price Pattern.

The strategy has been to play “Ping-Pong” or plan intraday trades (or even brief swing trades) on movements toward and away from these compressing trendlines.

After the high volatility collapse late August, price has wound down into a new short-term equilibrium point near 1,950.

The Third Price Principle is known as the “Price Alternation Principle” which states that price alternates (moves back and forth) between periods of Range Expansion (like the big move down in August) and Range Contraction (like most of 2015 before the collapse and now the current triangle).

As the Triangle Trendlines narrow, we also must be ready for a likely breakout or new impulse away from the 1,950 Value Area.

Note that we’re going to be direction neutral, ready only to play the departure or breakout from value.

This could lead to a bullish surge toward the 2,020 level or even the 2,045 high (100 points above us now).

Or, this could lead to a retest of the prior swing low near 1,880.

Here’s a clearer picture of the levels to watch and the price pattern nearing completion:

At the moment, the upper falling trendline intersects 1,970 while the lower rising trendline trades above 1,940.

The midpoint or “Value Area” is slightly rising and now trades where we are now – near 1,950 and 1,955.

For planning your next trade or series of intraday trades, look to be Bullish above 1,970 and 1,980; Bearish on a movement down away from 1,940; or else remain Neutral as we’ve been doing between the 1,940 and 1,970 compressing trendlines.

To pull the perspective back, take a look at my two new video updates on the broader picture for the S&P 500:

“Stock Market Retracement or Pending Reversal?  A Comparison to 2010 and 2011”

“The RSI Indicator:  Divergences and Major Market Reversals”

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Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

6 Comments

6 Responses to “The End is Near for Symmetrical Triangle in SP500”

  1. The End is Also Near for Crude Oil Triangle (Breakout Near) | Afraid to Trade.com Blog Says:

    […] End is Also Near for Crude Oil Triangle (Breakout Near) Sep 11, 2015: 12:40 PM CST While “The End is Near for the S&P 500 Triangle,” we’re also seeing the end of a similar pattern for Crude […]

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    […] Rosenbloom:  While “The End is Near for the S&P 500 Triangle,” we’re also seeing the end of a similar pattern for Crude […]

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    […] be sure to read last Friday’s post “The End is Near for the S&P 500 Triangle” – the end was […]

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    […] be sure to read last Friday’s post “The End is Near for the S&P 500 (NYSEARCA:SPY) Triangle” – the end was […]

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    […] be sure to read last Friday’s post “The End is Near for the S&P 500 Triangle” – the end was […]

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