A quick reading of the tea leaves before an early bedtime…SPY breakout shown above.
To my eye, this is a significant breakout. Volume did not meet the average, but I’m not surprised by that since it was the first day back after a major holiday.
The negative for the day was that SPY closed lower than the open, executing a slight “gap and crap.”
My guess is that we see a small pullback over the next couple to few days where price will revisit the breakout area at roughly $126.50. From there I expect a bounce and higher highs.
Conventional wisdom holds that should the SPY or QQQ breakout fail and the ETFs trade back into the triangle, this failure should be considered a stronger signal than the breakout itself.
I am looking to buy here on any weakness. My bullishness will quickly turn to cautiousness should the breakout fail.
Where’s the ROC?
Still short!
amen. I just got my TimeWarner cable bill(TWC). It went up. So, almost everything is going up in price. Food for thought.
How can that doji be a breakout, you dumbo?
How can it not be?
Investopedia explains ‘Breakout’
In practice, a breakout is most commonly used to refer to a situation where the price breaks above a level of resistance and heads higher, rather than breaking below a level of support and heading lower. Once a resistance level is broken, it is regarded as the next level of support when the asset experiences a pullback Most traders use chart patterns and other technical tools such as trendlines to identify possible candidates that are likely to break through a support/resistance level.
A breakout is the bullish counterpart to a breakdown.
Read more: http://www.investopedia.com/terms/b/breakout.asp#ixzz1iUQkgoU8
Nice work, Wood.
Can we please have a legit breakout without fail? Please?
Thank you.
I think you should wait for a multi-day pullback before entering any positions. Good analysis though. Chart patterns are the most reliable indicator.