Chart of the Day - Monday, October 21st, 2019

Today’s Chart of the Day was shared on Twitter by Sam McCallum (@honeystocks1). It's a weekly candlestick chart of the S&P MidCap 400 ETF, $MDY. Sam highlights the fact that price has been coiling into a triangle pattern over the past year. We often compare this pattern to the tightening of a spring. As the range contracts, energy builds up within the spring. When one of the pressure points is removed, the spring will explode in that direction. Similarly, as price works its way into a tighter range and moves toward the apex of this pattern, we'd expect a strong breakout in one direction or the other. Sam points out that price is getting very close to that decision point and that we could see a breakout as early as this week.