Gold Textbook Triangle

The Blue Megaphone and Pink Rising Megaphone Lock Gold Into a Textbook Triangle Scenario

The Blue Megaphone and Pink Rising Megaphone Lock Gold Into a Textbook Triangle Scenario

Between the pink rising megaphone and blue megaphone, trading formation rules now pretty much lock gold into a textbook megaphone-inside-megaphone triangle scenario.

An upwards breakout from the red triangle would be an upwards breakout from an inverse head and shoulders bottom with a triangle right shoulder.  The technical inverse H&S target would be at least 1800 but the long move sideways would imply a new all-time high for gold.

Gold Long-Term Rising Megaphone

Gold Long-Term Rising Megaphone

An upwards breakout would usually mean gold was extending its long-term rising megaphone (blue in chart above).

A downwards breakout, which is more likely, would target the 700s and likely lower in the course of forming a bottom.  A downwards breakout would complete the blue-rising megaphone with a retrace to its bottom.

QQQ is Trying to Break Down

QQQ is Trying to Break Down Through Its Orange Megaphone VWAP and Light Blue Megaphone Top

QQQ is Trying to Break Down Through Its Orange Megaphone VWAP and Light Blue Megaphone Top

QQQ is trying to break out through its orange megaphone VWAP for a trip to the bottom of the red rising wedge (green scenario).

If opex trading holds the line here, expect another surge to new all-time highs to complete a cop.  The faster the top, the more likely QQQ is to reverse at the light blue megaphone VWAP for a huge move up.

The slower and bigger the top, the more likely QQQ is to go for the light blue megaphone bottom.

SPY Price Channel Likely Top

SPY's Pink Price Channel Set Up in 2016 but Failed to Break Out When It was Supposed to in December

SPY’s Pink Price Channel Set Up in 2016 but Failed to Break Out When It was Supposed to in December

SPY confirmed the pink price channel on November 21, 2016 when it broke out past the previous channel high on August 23, 2016.  SPY was then in its critical decision wave for the channel.  That’s where the price either sets up a breakout into a melt-up or starts a top.

What SPY did was tag the channel top, pull back a little, and then fail to break out decisively (a breakout within a melt-up set-up would have looked like the purple scenario).

You often see this when the channel is forming a rising wedge (green scenario) or rising megaphone (orange scenario) top across the price channel top.  The rising megaphone scenario is the favorite.

Look Where QQQ Paused

QQQ has Broken Out of Its Red Topping Megaphone and is Paused at the Navy Megaphone VWAP

QQQ has Broken Out of Its Red Topping Megaphone and is Paused at the Navy Megaphone VWAP

QQQ has broken out of a topping megaphone (red) on the top of a larger megaphone (navy blue) and is now paused at the navy blue megaphone VWAP.

Because QQQ broke through the navy blue megaphone top to form a topping pattern, and because there’s a Neely set-up for a deep retrace of the move out of the August 2015 crash low, QQQ should go for the navy blue megaphone bottom.

QQQ should Bounce at Roughly the Red Rising Wedge Bottom to Retest the Navy Blue Megaphone VWAP Before a Breakout Downwards to the Red Wedge Bottom

QQQ should Bounce at Roughly the Red Rising Wedge Bottom to Retest the Navy Blue Megaphone VWAP Before a Breakout Downwards to the Red Wedge Bottom

QQQ should bounce off the bottom of the red rising wedge and navy blue megaphone bottom to retest the navy blue megaphone VWAP before continuing down to the critical decision point at the red wedge bottom.

If QQQ has a genuine breakdown through 100, next target is roughly 70.