For weeks I've been saying this market was coiling and needed a catalyst. Both the QQQ and SPY were forming a fierce pennant at the top of the range, which is price squeezing into a tighter and tighter box until it runs out of room. SPY looked like it wanted to break out. The QQQ looked like it wanted to break down. Neither one of those meant anything. A pennant is a jack-in-the-box. It's getting ready to squeeze, and that's all it is. It doesn't tell you which way and it doesn't tell you when. You can stare at it all day and it won't answer you until something forces the issue. So I stopped watching the pattern and started watching what price did at the edge of it. What I noticed is as SPY was trying to breakout, it wasn't getting that big move and just coasted at the

For weeks I've been saying this market was coiling and needed a catalyst. Both the QQQ and SPY were forming a fierce pennant at the top of the range, which is price squeezing into a tighter and tighter box until it runs out of room. SPY looked like it wanted to break out. The QQQ looked like it wanted to break down. Neither one of those meant anything. A pennant is a jack-in-the-box. It's getting ready to squeeze, and that's all it is. It doesn't tell you which way and it doesn't tell you when. You can stare at it all day and it won't answer you until something forces the issue. So I stopped watching the pattern and started watching what price did at the edge of it. What I noticed is as SPY was trying to breakout, it wasn't getting that big move and just coasted at the

We could draw a bunch of squiggly lines on a chart. We could throw a dart all over it. But let me tell you something, guys. If you blindly draw something and you notice that price is reacting really strong to it, you are onto something, my friends. Most people have this completely backwards. They go hunting for the right indicator, the right setting, the magic level somebody on the internet swears by. They think the line is the edge. It isn't. And once you see what really matters, you can't unsee it. I don't care what the line is. Whether it's something like a Fibonacci level, a technical pattern, a moving average, or your six-year-old drawing this with a crayon, if magically price is abiding to it, you are still onto something. Because you did not find a magic line, you identified what is controlling the move. That's the