Short term intraday patterns can not only be beneficial as set up on their own but they can also indicate where the market cycle of larger time frames is going next. Take for example the 15 minute Continuation Ascending Triangle alert from this morning's London open:

5-12-2009 7-27-11 AM.bmp

This pattern broke from short term congestion as it rallied up through the resistance of the asymmetrical triangle formation. This break of resistance ushered in more momentum and took the GBP/USD to and through the Forecast Region. Essentially what was a sideways market began to trend. The trend continues for over 150 pips and this kind of movement while not always typical of short term charts like a 15 minute, will effect larger time frames as well. Take a look at the current 240 minute chart:

5-12-2009 7-23-52 AM.bmp

The 240 had been stronger for the past two weeks as it has been climbing steadily. The 15 minute breakout was the catalyst for the bounce on the current candle's upward surge. This surge also coincided with uptrend line support from the Reversal Rising Wedge pattern. What is interesting to note is that if the reversal was going to happen the weakness would be first seen on the 15 minute chart as the Continuation Ascending Triangle pattern there would have broke down instead of up. Think of this as "one thing leads to another". If the 15 minute breaks higher as the 240 is nearing support, it's safe to say that short term there is not going to be a reversal down through uptrend line support of the 240 minute's Rising Wedge. In fact, as long as there is strength there is the chance of a continuation so keep an eye on the 240 minute's resistance line (green) for a possible breakout if prices continue higher. If there is weakness, then ofcourse look to the uptrend line support (blue) for the reversal. There's a good chance that there will be a 15 minute pattern alert that triggers a short if there's going to be weakness on the 240. Remember, "one thing leads to another"!

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