Chart of the Day - Monday, July 29, 2024

🏆 Today’s Chart of the Day was shared by Yuriy Matso (@yuriymatso).

• The Nasdaq led today for a change, closing higher by just +0.19%. In less than three weeks, it has pulled back as much as -9% on a closing basis.

• Using an hourly candlestick chart of Nasdaq 100 futures since the recent peak, Yuriy points out that price has coiled into a tight triangle pattern over the past three sessions. Pressure is building for an explosive move, or resolution, as it reaches the apex.

• Triangles “should” resolve in the direction of the underlying trend, which in this case is lower. However, resolving higher would indicate a reversal in the short-term downtrend and potentially end the recent pullback.

The Takeaway: The Nasdaq has coiled into a triangle pattern within a short-term downtrend. This triangle "should" resolve lower, but resolving higher would break the short-term downtrend and perhaps end the recent pullback.