Chart of the Day - Tuesday, July 12th, 2022

Today’s Chart of the Day was shared by Yuriy Matso (@yuriymatso). It's a 1-hour candlestick chart of Nasdaq Futures since the beginning of May. Yuriy points out that the Nasdaq has made a series of lower highs & higher lows over the past two months, forming a triangle pattern with an apex around 11,800. The S&P 500 has formed a similar pattern over the past two months around 3,850.  When price coils into a tight range like this, it suggests the market is gearing up for a significant move up or down. These consolidation patterns tend to resolve in the direction of the prevailing trend, which in this case is lower. If it resolves higher instead, the next major resistance level is around 13,000, which is about 10% higher. Either way, keep an eye on which direction this consolidation pattern resolves.