Triangle Formation Completed

The Dow completed a short term triangle formation today. A triangle formation is a technical formation with declining channel line and rising trend line, consisting of candlesticks getting smaller each day, forming a triangle shape. Triangle formations suggest that a breakout in the direction of the previous trend (bearish) is about to happen (triangles do sometimes breakout the other way but odds are that they are continuation patterns and not reversal patterns). I would be monitoring the intraday trading action closely over the next 2 days for early indications of the direction of breakout. At this point, prudent options traders who wish to take advantage of this breakout might consider a delta neutral position on the DIA.

Sorry for the short post today as I am running a fever due to the arrival of Autumn chills.