Descending Triangles

While going through a number of ETFs today, one pattern kept emerging - descending triangles. Below is a 30 day chart of XLE but you'll find that many look similar (XLF, XLP, XLY, and non-ETFs as well)

For those still looking for a tradable bounce this is good news. Using XLE as an example, it closed near the baseline of its descending triangle pattern...meaning you could go long, set a tight stop under the baseline, and have a low-risk trade setup. That said, descending triangles usually resolve themselves in the current direction of the bigger trend so be quick to take profits.

For an intermediate term trade, or a more conservative trade, wait to get short on a breach of the price pattern's baseline, with a stop above it.