The last few times these symmetrical triangles at rally tops have broken decisively to the downside.
We are in such a formation now. I have marked levels that might be good indicators of a breakout or breakdown and some short term targets.
I think the greater risk is to the downside while the European financial and political situation remains unresolved, but I do not wish to get ahead of this.
A lot of guys are expecting this to move up to a high around 1275 which is only about 15 points away. They might get the rug pulled out from under them. Some pundits are also talking book to 1310. That is possible. But first they need to take out the triangle, and then they have a clearer shot, but with a lot of overhanging headline risk. I'd rather stay out than risk it, and have to sleep with one eye on Italian and Spanish bonds.
Volumes in today's rally are laughably light. The adults in the bond market have taken the day off.
