Stalemate Likely To Resolve Itself Today

All eyes are on the contracting triangle pattern that has developed over the past couple of weeks. Until this pattern breaks, and probabilities are high it will be today, we will have a better idea what to look for over the next few weeks.

If prices break to the upside, then we may finally get the rally back up to the falling 50-day average we have been looking for. If it breaks lower, then look for a test of $131.50 and then possibly $126.

The intermediate and long term trend is down, so probabilities favor a downside breakdown. Upside breakouts should be looked at suspiciously until the price holds for more than an hour or two. An early break higher may get faded. A breakdown could also get faded, but the likelihood is much lower due to the fact the market is in a downtrend.

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Outlook:

The current outlook now depends on the direction the continuation triangle pattern breaks. If it breaks to the upside, then we expect prices to rally into the falling 50-week average for a high probability shorting opportunity. If prices break lower, prices may retest January lows for a high probability buying opportunity.