In trying to explain to someone what a 'confirmed breakout' from a symmetrical triangle' might look like, I have decided to draw the current formation, within which US equities are coiling, as 'flags' rather than triangles.
These flags are a little simpler to see on the chart, as they are quite consistent with the existing lines of support and resistance. I also think we have now reached that point in which if they break down they will fall rather decidedly, probably based on some precipitating 'trigger event.'
The most likely candidate for this is a deterioration in sovereign default.
We are approaching a holiday weekend in the States, and the close of June and the second quarter. So painting the tape, and prepping for a few more IPOs to be squeezed out like Hudson River brownfish, will be the order of the day, but with the looming shadow of another financial crisis making the players uneasy in their ill gotten gains.
Don't get me wrong. These jokers do not give two hoots for the common people of any nation. What concerns them, occasionally, is getting caught. Or even worse, cut off from the airport by pitchforks and torches. But they rarely think that far ahead.
