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SPX500 - Neither Here Nor There

SPX500 - Neither Here Nor There

Paul Robinson, Strategist

Talking Points:

  • SPX 'chop-n-slop' (range-bound) trading continues until further notice
  • Head-and-shoulders top turning into a triangle formation
  • Remaining patient; better trading opportunities in FX

S&P 500 (stock indices in general) remain range-bound. For a short time there, it looked as if a ‘Head-and-shoulders’ pattern was being carved out, however; as time continues to elapse we are seeing the formation of a triangle become an increasingly probable outcome. It is not uncommon for H&S patterns to become a triangle. Provided that the long-term trend remains up, a triangle is more likely to trigger to the upside (acting as a consolidation pattern) rather than to the downside (reversal pattern). However, with that said, the safest way to trade triangles, or any chart pattern for that matter, is to wait for a confirmation breakout before initiating trades. At this time, range-bound price action in stocks makes trading FX a more attractive proposition.

SPX500 Daily Jan ’14 – Present

--- Written by Paul Robinson, DailyFX Research

To contact Paul, you can email him at instructor@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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