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What is the best way to blow up resistance?
http://spiketradeblog.blogspot.com/2011/11/what-is-best-way-to-blow-up-resistance.html

With the old reliable coiled spring.  A symmetrical triangle has developed on the daily S&P 500 index.   In my opinion, it is the most reliable bullish pattern in TA.   It also appears that a Continuation Diamond (Bullish) pattern has traced on the same chart.  This is a rare pattern that has the potential to launch prices up sharply through resistance. The deception that this type of consolidation induces is astounding.  This is due in part to the apparent weakness in both volume and the MACD indicator while under the influence of consolidation.   How many short sellers got vacuumed into yesterday's action as a result of these indicators?  Now we find the pattern poised to break out.
Despite the news across the pond this past month, market conditions have changed and they changed the 2^nd week of October.  I watched so many bears doubt the 09 rally all the way up.  They were unwilling to embrace the bull then, and they seem to be unwilling now. In the meantime, quietly, the market keeps building new launch pads for higher prices. Take yesterday for instance, so much bad news to react to, yet the market shook it off and put the last piece of the puzzle into this pattern.
The measurable level of fear does not support what it's purported to be by the masses.  Big money is buying this market and they already have a pocket full of small caps. Believe me; I personally sold them a few shares on the cheap.  The train has left and unfortunately too many reserved seats for cautious investors are empty.
Anything can happen and we could spill downward out of this consolidation, but when the dots are connected, it seems to outline a bullish picture.


Stephen M.

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