Friday, September 11, 2015

MTU Weekend Ed. - Inside Bars and Triangles (9/11/15 close)

Indecisive price actions produced another (weekly) inside bar in SP500 this past week (Chart 1 and Inside Bar(9/4/15)). The configuration of these bars start to hint at a triangle. Is it bearish or bullish?

A bearish triangle would be counted as a wave four or wave X at this juncture. It is also more likely under normal circumstances and the most straightforward interpretation.

A bullish triangle would be treated as a terminal wave five. It is also not uncommon since the 2009 bottom.

Chart 2 details these two potential triangles.

[red] The bearish triangle is a lengthy wave C following wave A-up and wave B-down since the August low.

[blue] The bullish triangle is a small degree wave [c]-down of wave 2/B-down following a wave 1/A-up off an orthodox low.

[gray] Yet another bullish triangle.