Following up from yesterday’s post “Get Ready for Range Expansion Play from SPY Intraday Triangle,” we see that we indeed get the range expansion breakout trade as expected by the symmetrical triangle of yesterday.

Not only does it serve as a great example of real-time identification and follow-through of the pattern, but we see a similar though smaller compression triangle forming today at 1:00 EST on the SPY.

Yes, it's consumer discretionary.

Yes, it's a breakout over January 2010 highs.

Yes, all is bright and wonderful in the world and stocks can rally without end and nowhere near support for weeks on end.

Chart of The Day: "Today's chart illustrates how the recent rise in earnings has impacted the current valuation of the stock market as measured by the price to earnings ratio (PE ratio). Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1936 into the early 1990s, the PE ratio tended to peak in the low 20s (red line) and trough somewhere around seven (green line).

Reader Abraham notified me that Potash (POT) raised guidance after the bell.... hold on, need to get this egg off my face to read the press release. 

If you’ve been lulled to sleep by the recent intraday market action, don’t fret.

According to the long-standing price principle of “Range Expansion and Contraction,” the next move in the market is likely to be a range expansion breakout swing move, that will offer opportunities for those aggressive enough to take them.

Let’s take a quick ‘pure price’ look at the S&P 500 ETF SPY and note the symmetrical triangle compression and the boundaries to watch for a potential breakout.