The market was clearly wanting to go higher; it broke the session highs and then formed a J-Lo. But with the 169 above, this failed, leaving a perfect pin-bar clue on the way. Price then began to compress around the fib that had capped the first move up, forming a triangle.
This turned out to be a perfect Broken Triangle Reversal setup: it broke up first, then reversed back into the triangle to make a swift attempt lower which was quickly rejected, giving the market enough welly to break back up and this time it held.
I took the first break and was very nearly stopped – this trade should be taken as a retest, and if I have taken the first break, it is worth adding to the trade on the second break as it’s such a strong pattern.
A perfect J-Lo did set up a few minutes later above the 169 with an entry just above a fib and the Oct 26 low.
