If this is a distribution, here's the setup that I'm looking for
Price action and patterns
Price has been creating higher lows and lower highs, effectively creating a big pennant (a symmetric triangle).
Accumulation or Distribution?
Symmetric triangles can be a re-accumulations, or they can be distributions.
Seeing the fact that we have already been rallying for a long time and that price is overextended to the upside (mainly JPY), I personally think that this is a distribution and that big players are selling into the consolidation.
Future Price behaviour
Word of caution
Keep in mind that we are still in a uptrend so trading against the trend is dangerous.
The trend is your friend!... until it's not anymore ;)
Possible outcome:
I have outlined what a possible outcome could be with the arrow in pink:
Price would break the level to make people think that price is going long.
It would then aggressively break down the level and start its new downtrend.
But first, let's see how price will be breaking this triangle, and then react later if the setup still looks valid.
what do you think will happen?
Bigger picture
Here is a view at the consolidation witch is above the last high, meaning that it is likely to trap buyers who are trading breakout patterns:
Price has been creating higher lows and lower highs, effectively creating a big pennant (a symmetric triangle).
Accumulation or Distribution?
Symmetric triangles can be a re-accumulations, or they can be distributions.
Seeing the fact that we have already been rallying for a long time and that price is overextended to the upside (mainly JPY), I personally think that this is a distribution and that big players are selling into the consolidation.
Future Price behaviour
- We can clearly see that we have clear lows where stop-losses are sitting tightly.
- If price were to start going down, it would trigger a ripple effect where price will be fueled down even more by taking out those stop-losses (witch is essentially short liquidity).
- I expect that price will rebound up when it reaches the last low created from the distribution
Word of caution
Keep in mind that we are still in a uptrend so trading against the trend is dangerous.
The trend is your friend!... until it's not anymore ;)
Possible outcome:
I have outlined what a possible outcome could be with the arrow in pink:
Price would break the level to make people think that price is going long.
It would then aggressively break down the level and start its new downtrend.
But first, let's see how price will be breaking this triangle, and then react later if the setup still looks valid.
what do you think will happen?
Bigger picture
Here is a view at the consolidation witch is above the last high, meaning that it is likely to trap buyers who are trading breakout patterns: