After finding support and consolidating near 1391.00, the US500 index CFD broke out of its short-term range and is now in a position to challenge the Autochartist key levels resistance level at 1406.70. Currently, this is only an emerging pattern, but since the main trend is down, bearish traders may decide to use this level to re-enter on the short-side

The Significance rating of this chart pattern is 5 bars. This means that the key level has been touched 5 times in the past. The 60-minute chart suggests that although this key level has been touched several times, it has at times acted as a pivot price. After breaking through this level the first time about a week ago, the index CFD proceeded to fall sharply. On the breakout above this level on March 26, the index CFD surged to the upside.

Although the key levels trading tool is easy to use, it is suggested that traders use an additional indicator such as the Average True Range to determine the strength of the move as it approaches the key level. This indicator is used to gauge a market’s short-term volatility. Rising volatility increases the odds of a successful breakout while falling volatility typically indicates the breakout will fail or at the least, the rally will be labored.

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After completing a retracement of a recent break, the UK100 index CFD confirmed Tuesday’s secondary lower-top formation with a break through the uptrending support line of a triangle chart pattern on the 240-minute chart and a dramatic break of the swing bottom at 5801.00. This move completed the chart pattern and set up a potential break into the Autochartist target zone at 5711.11 to 5606.

The overall quality of the chart pattern is rated an average 5-bars. The initial trend is rated a slightly below average 4-bars. This quality indicator measures the strength of the trend prior to the chart pattern’s formation. Since the initial trend is down and the breakout is to the downside, Autochartist has confirmed that the trend change is a continuation move. The uniformity quality indicator looks for equidistant tops and bottoms and the number of tests of support and resistance. This quality indicator is rated a solid 7-bars. The 7-bar clarity rating suggests that the amount of market “noise” is below average.

The triangle chart pattern is a non-trending pattern. It typically leads to a high momentum breakout since the gradual narrowing of the support and resistance lines compresses the market’s volatility. The maximum 10-bar breakout rating backs up this assessment. Strong selling pressure was present when the market broke through the support line. If accompanied by higher than average volume, this market should have little trouble reaching the Autochartist target zone over the near-term.

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The US500 spiked to the upside and then broke, helping to form the resistance line of a rising wedge chart pattern. This emerging pattern suggests the index CFD is poised to work lower, but must overcome a retracement area before it can test the rising support line.

The overall quality rating of this emerging pattern is a solid 7-bars. The initial trend which rates the strength of the trend prior to the chart pattern’s formation is rated an average 5-bars. The initial trend is down as is the projected break, leading Autochartist to identify the trend change as a continuation move. The uniformity quality indicator looks for the presence of equidistant tops and bottoms. This quality indicator is rated an average 5-bars. The maximum 10-bar clarity rating suggests virtually no distracting market “noise”.

The rising wedge chart pattern is a non-trending pattern. It is created by combining the characteristics of the triangle and channel up chart patterns. Its gradual narrowing suggests impending volatility especially if the index CFD becomes rangebound. Currently, the market seems poised to break lower but must take out a short-term retracement zone at 1405.00 to 1400.75 before doing so. If this area is penetrated then stops may be triggered down to the support line. Since the main trend is up, traders should watch for buyers to come in on this break, however if downside momentum continues then look for a completed pattern to form.

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The Switzerland 20 (Swiss 20) index CFD broke out above the resistance level discovered by the Autochartist Key Levels technical indicator, setting up a potential rally into the forecast price zone at 6317.70 to 6357.14. Now that the index CFD has closed above the former resistance level at 6288.00, traders should look for this level to become support.

The Significance rating of this key level is 3-bars. This means that prior to the breakout; the 6288.00 level had been tested 3 times. On a scale of 1 to 10, this is low so traders have to count on upside momentum to drive it away from this key level. If buyers don’t show up to drive volatility higher on increased volume then the market is going to straddle the key level or perhaps drop below it.

Although trading key levels appears to be simple, it is suggested that traders look at some technical indicators other than price to determine if there is strong buying interest in the move. One such indicator is the Average True Range or ATR. This indicator will tell the trader whether the daily range is expanding. In addition, traders should watch to see if the daily volume is above the average volume. This would indicate that traders are buying with clarity and conviction. The key to success with any breakout move is increased volatility and volume. The worse that can happen would be a drop in momentum because this would likely encourage bullish traders to pare their long positions.

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After consolidating for several hours near the high of the day following an initial surge to the upside, the Germany 30 index CFD (DE30) rallied at the close and in the process completed a channel down chart pattern when the market took out a downtrending resistance line. Although the breakout was relatively mild, expectations are that increased volatility and rising volume should put it on course to reach the Autochartist target zone at 7033.00 to 7070.00 over the near-term.

The overall quality rating of the chart pattern is a slightly below average 4-bars. None of the other quality indicators really standout as significant. The initial trend was down at the onset of the chart pattern. This quality indicator measures the strength of the trend prior to the chart pattern’s formation. Since the initial trend is up and the breakout is to the upside, Autochartist has determined that the trend change is a continuation. The uniformity rating is only an average 5-bars. This seems a little high considering that there doesn’t appear to be any equidistant tops or bottoms. The clarity quality indicator measures the amount of market noise. Its 4-bar rating means the quantity of gaps and price spikes is slightly above average.

The channel down chart pattern is a trending pattern. It is often found attractive by swing traders who wish to sell resistance and buy support. Its breakout rating is a weak 1-bar. This usually occurs because of the distance between the support and resistance lines. Since these barriers are so wide apart, a market is usually overbought by the time the breakout occurs. This means that traders should be ready for a retracement of the last rally if upside momentum fails to materialize.

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The Italy 40 (IT40) index CFD broke through the support line of a rising wedge chart pattern on the 240-minute chart, triggering the start of a possible break into the Autochartist forecast price zone at 15570.00 to 14450.00. The fact that the chart pattern was created over 156-candlesticks is appealing since often the longer-term patterns lead to the sharper breaks.

The overall quality of the chart pattern is a solid 7-bars. The initial trend which measures the strength of the trend prior to the chart pattern’s formation is an average 5-bars. The initial trend is down as is the breakout, making the trend change a continuation. The uniformity indicator looks for equidistant tops and bottoms as well as the number of successful tests of the support and resistance lines. This quality indicator is rated 7-bars. The clarity indicator measures the amount of market noise. Its 8-bar quality rating means that the number of price gaps and price spikes is well below average.

The rising wedge chart pattern is a trending pattern. The length of this pattern is impressive and the breakout through the support line is likely to be significant. The Autochartist breakout rating is the maximum 10-bars so traders should expect an acceleration to the downside. The Autochartist target zone suggests the possibility of a minimum 50 percent retracement of the last rally, but also a 100 percent retracement. It is suggested that traders read the momentum present in the market on the test of the first target price. If selling pressure is strong enough and traders are hitting the market with conviction, then it may trade deep into the target zone.

For further information on this and other Autochartist products, visit our website at www.autochartist.com.

The US500 index CFD reversed course late in the trading session, forming a new swing bottom at 1402.00. In addition, the ability to move away from this bottom, helped form the support line of a triangle chart pattern on the 60-minute chart. Based on the near-term range of 1411.25 to 1402.00, traders should expect a minimum move to 1406.75. If this price is taken out and the market is able to establish support, Autochartist is forecasting a possible move to the down-sloping resistance level currently near 1410.00.

The overall quality rating of this emerging chart pattern is an average 5-bars. The initial trend which measures the strength of the trend prior to the chart pattern’s formation is also an average 5-bars. The uniformity quality indicator looks for the presence of equidistant tops and bottoms. The 6-bar rating indicates a slightly above average occurrence of these events. The clarity indicator measures the amount of market noise present in the chart pattern. Its low 4-bar rating indicates that the amount of price gaps and price spikes is slightly above average.

The triangle chart pattern is a non-trending pattern. Typically as its support and resistance lines gradually move closer, price ranges compress to indicate impending volatility. At this point, the triangle is still wide, making the pattern more attractive to swing traders who wish to trade both sides of the market. If the US500 index CFD continues to move inside of the triangle then traders should expect a possible breakout, making the chart pattern more attractive to momentum traders.

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Following a prolonged move in terms of price and time, the Japan 225 (JP225) index CFD made a rapid midday turnaround, setting up the market for a possible challenge of the Autochartist Key Levels resistance level at 10121.00. A failure to breakout above this area should trigger another sharp sell-off as this will mark the index’s third lower top since forming the main top near 10181.00.

The significance this Key Levels setup is rated 6-bars. This means that 10121.00 repelled the market on numerous occasions as it was establishing its importance as a resistance level. The first few times this area was tested the breaks were minimal and at times the price level acted as a pivot price as the market straddled both sides.

The last break through 10121.00 was more pronounced, leading to a significant drop to nearly 10041.00 before the retracement began. With a down trend now firmly established, trend traders may seize this retracement opportunity to increase their short positions. This could lead to a break that goes beyond the last bottom. Based on the main range of 10181.00 to 10041.00, the first upside objective is a 50 percent level at 10111.00. This is slightly below the Key Levels target but in the neighborhood, forming a resistance cluster that could prove to be solid stopping point. If this key level does not form resistance and the market begins to breakout, traders should consider the upside as this key level could become support.

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After forming a top near 5974.00, the UK100 index CFD proceeded to move sideways along a resistance line, confirming the validity of an emerging triangle chart pattern on the 240-minute chart. With a bias to the downside forming, Autochartist is forecasting a downward direction. In addition, since the index CFD is nearing the apex of the triangle, traders should also be anticipating a breakout move over the short-term.

The overall quality of the chart pattern is an average 5-bars. The initial trend which measures the strength of the trend prior to the chart pattern’s formation is a weak 1-bar. The uniformity indicator looks for the presence of equidistant tops and bottoms. This quality indicator is rated a slightly below average 4-bars. The clarity quality indicator measures the presence of price gaps and price spikes. Its maximum 10-bar rating indicates the absence of potentially disrupting market noise.

The triangle chart pattern is a non-trending pattern. The gradual narrowing of the support and resistance lines typically forecasts impending volatility. With the UK100 index CFD rapidly approaching the apex of this triangle, traders should watch for the start of a potentially volatile move. Autochartist has determined that this is likely a continuation chart pattern so traders should anticipate a breakout through support.

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The Japan 225 (JP225) index CFD broke through the support line of a rising wedge chart pattern on the 240-minute chart late in the trading session on Friday to trigger the start of a possible break into the Autochartist price forecast zone at 10009.92 to 9871.79.

The overall quality rating of this chart pattern is a solid 7-bars. The initial trend indicator which measures the strength of the trend prior to the chart pattern’s formation is also 7-bars. In addition, the initial trend is down as well as the breakout, making the trend change a continuation. The uniformity indicator looks for equidistant tops and bottoms as well as gauging the strength of the support and resistance lines. This indicator is rated 7-bars. Finally, the clarity rating is also rated 7-bars. This means a well-below amount of market noise.

The rising wedge chart pattern is a trending pattern. Its appearance is that of the channel up and the triangle. The gradual narrowing of the up sloping support and resistance line typically indicates impending volatility. The fact that the index CFD broke through support with conviction is the main reason behind its maximum 10-bar breakout rating. If downside momentum should continue then traders should look for a test of the target zone within the expected time frame.

For further information on this and other Autochartist products, visit our website at www.autochartist.com.