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Regarding the second triangle (black boundaries on my chart)...A...

  1. YLJ
    819 Posts.
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    Regarding the second triangle (black boundaries on my chart)...
    A Symmetrical Triangle should have the highest volume at its point of formation
    followed by generally declining volume throughout the pattern until the breakout
    point. That is arguably the case here, though it is not as evident as usual. Although
    higher volume should be expected around major swing highs/lows the few days of
    exceptionally high volume at the end of September is a little out of line.
    H&S shoulders Patterns commonly have the highest volume in the "head" and
    sometimes in the "left shoulder". It is more important though to look at the general
    volume picture instead of one or two days on their own. From the inverse H&S
    perspective here, there is a lack of the more ideal symmetry between the shoulders
    but this is often enough the case. I also tend to prefer them with a horizontal neckline
    (which is still a possible adjustment of the current formation) if 2.77 provides some resistance.
    Either perspective is valid IMHO and patterns should always be viewed in the context of
    the bigger picture and other implications on the chart. Even then, they are just tools for
    identifying definable entries and try to increase success probabilities but are never guaranteed.
    The breakout yesterday was strong and price action seems to continue to support it, especially
    in light of the rest of the market today.
    Hope that makes some sense...

 
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