Stocks close higher after lower open, Gold up again

spy0220.pngStock indexes opened lower, and then turned around to close higher, almost in a mirror image of the previous session. On the chart to the left of the etf of the S&P 500, you can see prices with a sideways trend. I drew a yellow horizontal line and you can see how price bars are overlapping. There is somewhat of a sloppy triangle forming with prices moving into the apex. Momentum is mixed. The trend indicator is still slightly down, but with prices moving sideways there seems to be much indecision in all the indicators. The market is definitely not quiet, as sideways prices could suggest. There seems to be much tension between bullish and bearish forces, with rather violent intra-day swings. There should be a breakout of this tightening pattern fairly soon. My guess would be for the previous trend to reassert itself and prices to at least re-test the previous lows. However, my guesses are not as accurate as a flip of the coin, so I am not trading on my guesses and will wait for a clear signal, and the signals are far from clear right now. Trading a re-test of a breakout is the safer play, as many breakouts fail, especially comeing out of these coiling up pattern, as the initial breakout will often be in the wrong direction trapping traders.
Gold was higher again today after some early profit taking. It seems like this market will never go down. Trend and momentum are obviously up, with the breakout of the triangle I pointed out a few posts back breaking to the upside. Had that triangle been broken to the downside there would have been some longer term negative implications, but that has been negated for the moment. There is still divergence between the mining shares and the gold price, although some mining shares made a good move up today, so that may be resolved if this rally continues. I still think the trade is too crowded to the bullish side. So far my indicators don’t seem to care.