Will They Hold ?

We don't like to disagree with what we see. It is entirely possible that the US Dollar Index (futures) are in a running triangle, as shown in the daily chart below. In fact, one form of a valid triangle has already formed because the minute ((e)) wave, circle-e, has already crossed back below Minor wave 3.

US Dollar Index Futures - Daily - Potential Triangle

There is some evidence for the triangle in the fact that the MACD is dead neutral at the zero line, and there were two humps up in the MACD previously, which could have been third wave locations. Further, the potential triangle has the right look, and the daily EMA-34 goes through each lettered wave expressing good form and balance. 

A running triangle is usually bullish and means there could be another significant spurt higher. But triangles are funny birds, and very tricky. The triangle could form more waves, expand once in a fake-out and do other things like stall out sideways to frustrate even those who might recognize it. As we have discussed earlier, the potential triangle could fail lower in which case the three-wave sequences might become part of a diagonal, lower, instead. But, if it does not fail, the best confirmation will be to exceed the high of the minute ((d)), circle-d, wave first.

And how about the three-day VIX? Triangle?

VIX Cash - 3 Day - Potential Triangle

Will a triangle in this market indicator hold? It has similar characteristics to the Dollar's potential triangle.

And, finally, a potential nested i, ii, ((1)), ((2)), down in the hourly ES futures. Will it hold?

As a reminder, in no case is micro-((2)) allowed above the high of subminuette wave ii. The market was extremely whippy as the result of the Payroll Employment report. But, so far, there are no degree violations I can see. Yet lower hourly lows are needed to better establish a daily down trend. So, we remain flexible, cautious and patient to see if some of these patterns resolve as expected or not.

Have an excellent rest of the weekend.

TraderJoe