We've seen this all before. The sure-fire short setups get waxed as trendline support holds. Then the bulls grow confident as the market soars only to get turned back by trendline resistance. The cycle continues to repeat itself until we get resolution. If you time your entries perfectly, the triangle formations can be powerful trading patterns, but patience and extreme discipline is required.
Right now, the market is faced with exactly that triangle mentality. The triangle keeps squeezing with each high moving lower and every low moving higher. At some point, something must give. That time is quickly approaching. The breaking of the triangle pattern doesn't necessarily dictate whether the bear market ends. In fact, I would argue it doesn't matter at all. It does matter whether the bulls can turn the recent upside action into something longer lasting, however.
Let's take a look at the unfolding triangles, first on the S&P 500:
The odds of reaching that first Fibonacci retracement (38.2%) area increases greatly if the major indices can break their current triangle patterns with heavy volume. That's what I'll be looking for as next week unfolds. Also, financials helped to spark the turnaround on Thursday morning and the rally has continued in that space since. If and when that rally ends, it will likely signal the end to the overall market rally as well.