Chart Analysis 8-2-12

Here's a Facebook post from Investools Instructor Dave Johnson talking about the overall market movement.  He is pointing out that the market has broken through a resistance line and has gone back below it.  His belief is that the market will go back down to its support line and then back up to break out of its resistance line again.


An ascending triangle pattern is a potential trend continuation pattern that occurs in an uptrend that moves to a higher high, pulls back to a higher low, rises to a similar high and then pulls back to another higher low creating a horizontal resistance line and a rising support line. If the trend continues a breakout of the horizontal resistance occurs. In my experience, very often a breakout of resistance is followed by a pullback or test of the breakout where old resistance can become new support. This pullback test is common and can be expected on breakouts.