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I wrote 2 days ago that I am watching for the Dow Jones & S&P500 US market to form an ascending triangle and there is a possibility of break out to trend high. Did you notice Dow Jones and S&P500 broke out from an ascending triangle yesterday? Dow Jones broke resistance level at 11,735 level and S&P broke the resistance at 1,292 level.

Do you think that was a real break out yesterday?

Well, I did mention too we need to watch out for the volume. How’s the volume of Dow Jones & S&P500 yesterday? It was not high and indeed it was a day with lower volume than the 60d volume average. So, the break out does not have enough fuel to rocket up.

Volume is the market participation, the high the volume, the more participation and hotter the market. So, in any breakout trading, we need to have a higher volume day in order to push the stock further up. It did not happen yesterday.

Plus, the candle body is very small, showing still lots of uncertainty and hesitation in the market, there is still tug of war between the bear and the bull. This again, is another sign to show a weak break out.

So, likely we will see the market pull back for a while and may have more price action around the resistance level. If it break up, there is a high chance that Dow Jones & S&P500 US Market will re-test the 200d MA resistance. On the other hand, the US market will re-test the July low if the breakout is not successful.

Dow Jones Stock Market Trends Ascending Triangle Breakout

S&P500 US Stock Market Trends Ascending Triangle Breakout

DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.