Current Technical Viewpoint

This is a chart I did yesterday outlining the two major things I see in the market's technical structure. It is actually pretty exciting because trades like this don't come around that often. There are a few key places that stops can be set to help make this trade a 4x+ reward/risk!

1) In green we are consolidating after a very quick bull move in October. This triangle could be considered a bull flag with an expected move north once the triangle is complete. This should occur in the next few days/week, if so. A solid break above the green upper trendline would give more confidence in this count. We were very close today. Watch out for a potential trendline backtest if the breakout does occur.

2) The potential bearish head and shoulders set up is equally apparent on the chart. This expectation would take the probabilistic lead with a breakdown below the uptrend of the last few months (currently around $1240). Watch for a backtest here as well (of the lower trendline).

These two scenarios are basically polar opposites, but can still be taken advantage of. One way to do this is to sit on the sidelines until such break occurs (either up or down) out of the triangle. This should allow a potential 30 pts+ in expected profit. Another way is to buy a straddle (if you are into options). This will allow you to capitalize no matter which way the market goes (you just want to make sure that it in fact does move).

Of note too are the indicators at the bottom of the chart. Both of them are showing bullish signs by making higher highs (not highlighted, but apparent). A breakdown of this could help signal an upcoming trend change and preempt a break of the price trendline...just something to keep an eye on.

Finally, volume isn't on this chart, but it has been falling somewhat during this triangle period. That supports the triangle theory. However, volume has been heavier on the down days (such as Nov 8).

Good luck!