The congestion in the U.S. Tech 100 index started at the beginning of Tuesday’s lunchtime doldrums and extended through the session’s close. This put the index within the range from 1781.75 to 1755.25 and helped form a Triangle pattern on the 60-minute timeframe. Price action is still trading with a level of volatility, as confirmed by the five-bar Autochartist Initial Trend reading. The distribution market cycle within which the index is trading will decrease the potential for follow-through beyond the pattern’s support and resistance levels, causing prices to exhaust at recent lows and highs.

The Triangle breakout is at 1777 (X), while the breakdown waits at 1759.25 (Y). This range is wide enough that the U.S. Tech 100 can continue to bounce within the pattern; should this occur the volatility will drop as the Triangle pattern’s range narrows. If price action transitions to a quieter accumulation market, the likelihood for momentum and follow-through after a pattern break increases. Regardless, be sure to confirm the momentum accompanying a break by making sure the Autochartist Breakout reading has a value of six or more bars.

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