- Since the worst point of sub-prime and markets bottomed in early 2009, cable has been trading in a triangle formation. Thus far, roughly 6 legs of the triangle is complete, that is to say, a breakout from this point on should not be unexpected. Of course, having taken a very long >3.5 years to form, timing of the downside continuation breakout is correspondingly difficult to nail down.
- Triangle lower boundary is around 1.5400 now.
- Cable triangle looks like a 4th wave ie there is a highly tradable 5th to come.
- Triangle downside objective, if validated, = around 1.22.
- Shock and awe is not the objective of technical analysis. Mental preparation is the point of this exercise here.
- Of course, I have to be prepared that current levels turn out to be support off the triangle lower boundary and we bounce strongly from here. Size matters!
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