<<Aiii>> S&P 500, FTSE 100 charts: bulls try to rally

In last week's technical analysis of the S&P 500 index chart pattern,
the following observations were made: "… S&P 500 index shows
consolidation within a symmetrical triangle for the past two weeks …
Triangles tend to be continuation patterns, which means that the
likely break out will be below the triangle. But triangles are quite
unreliable, so it may be better to wait for the break out."

The technical indicators were bearish, so the likelihood of a downward
break had seemed higher. However, as often happens with triangles, the
actual break out was upwards – probably a bear trap planned by bulls.
Short covering aided the break out.

Upward break outs require strong volumes to sustain. Have a look at
the last three volume bars as the index broke out above the 20 day EMA
and the triangle. Volumes were not significantly higher. In fact, on
Fri. Apr 27 '12, volumes dropped as the index rose above the 1400
level. That keeps open the possibility of a 'false' break out.

Read more at:

http://tinyurl.com/mobugobu

--
Independent Investor Handbook
http://tinyurl.com/3octm2r

Ultimate Technical Analysis Handbook
http://tinyurl.com/yej8kem

How to Use Bar Patterns to Spot Trade Setups
http://tinyurl.com/yhszv6t

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