The return of the Symetrical Triangle

Hi
WE got another trade entry yesterday with the aggressive sell off followed by a retracement, and an inside bar to confirm reversal. The trade was potentially about 2.5-1 and well worth the trading. Unfortunately the move down got past 1-1 but then reversed. This is an important signal to us as it created a higher low and we should have exited the trade for a profit or break even at worst. If it had put in a lower low we may more inclined to stick with it.

The higher low turned out to be a reversal signal.

Context
The market is still bouncing around inside a bigger range. In our time frame its up and down enough to offer some opportunity but on a bigger time frame its really stuck. At this stage there is no sign of the expected bailout request coming from Spain. We will still be watching Spanish bond pricing and especially the 10 year bonds closely as borrowing costs push towards unsustainable levels for the Spanish. At any time supportive news on the Spanish bailout could spike price otherwise I am expecting a slow day probably downwards day.

Technical Analysis
Today we see the return of the symmetrical Triangle an historically common chart shape as we come out of Europe. Breaks of the Triangle will give us our first look at today’s directions.
The daily pivot has dropped and now sits close to the middle between recent support and resistance.
The 4H chart has 6 of the last 7 bars as buyer bars and some retracement is likley.
So with a 4H looking over brought, the daily pivot moving down, and price approaching WP I am a little bearish today.

The Day Ahead –
We will watch for the break of the triangle as an initial confirmation of direction.
Bias- I think the market will slide down, and then may spike up on Spanish bailout or bond news….
 NO TRADE:
BEST Short entry; I need to see the Triangle broken to the bottom and then retested… even then I may wait for a test of the DP.
BEST Long Entry; I would like to see a break of the triangle, and even then possibly a break above 1.3033

Other Entries;

RED NEWS Today
1:30pm USD Core Durable Goods Orders m/m
1:30pm USD Unemployment Claims
3:00pm USD Pending Home Sales m/m
If you have any questions you can submit them here or email me at paul@paulbotterill.com
All the best
PBT