This is the pattern that's forming in S&P, Dow, Nasdaq. Let's take a look at the pattern:
Summarizes: http://www.trending123.com/patterns/descending_triangle.html
-----Formation-----
"bottom trendline is horizontal and the top trendline slopes downward."
"horizontal bottom trendline need not be completely horizontal."
"the inbound trend should be at least 2 times the duration of the pattern."
"Look for a region of support at the bottom trendline and a line of resistance at the highest high of the Triangle."
-----Confirmation-----
"price breaks out of the triangle formation to close below the lower trendline."
"between three-quarters and two-thirds of the horizontal width of the formation. The break out, in other words, should occur well before the pattern reaches the apex of the Triangle. The closer the breakout occurs to the apex the less reliable the formation."
"Compare prices to the 200 day Moving Average. When prices are close to or touch the 200 day Moving Average this signal is considered stronger."
-----Volume-----
"volume should diminish as the price swings back and forth between an increasingly narrow range of highs and lows. However, when breakout occurs, there should be a noticeable increase in volume. If this volume picture is not clear, investors should be cautious about decisions made based on this pattern."
