Here is another possible scenario that will play out. I actually like this one more than my previous analysis as it gets the same job done, but has stronger support for the initial drop, and correspondingly the potential for a touch of the purple long term down trend channel resistance.
Essentially I am now looking at this black small downtrend channel. It plays out over a slightly longer time period than my previous analysis; and longer time period patterns are generally more reliable than shorter periods. I am looking for another touch of the black resistance line corresponding with the 3 hour 55 EMA which are both converging with the dotted black resistance line to form strong resistance. This should occur within the next 24 hours or so around 8050. From here we should see a drop to the support of the down trend channel as well as the red longer term uptrend line at around 6980. Here we will find very strong support AND close our CME gap.
Next we will need to clear our red CME gap and an upwards breakout of the black downtrend channel takes us as high as 8800 which is right at the top thus clearing our gap. From here it will be down down down. Still long term bear, so again have flagged this is short even though I am expecting one last test of the top (at least as far as 8550).
Essentially I am now looking at this black small downtrend channel. It plays out over a slightly longer time period than my previous analysis; and longer time period patterns are generally more reliable than shorter periods. I am looking for another touch of the black resistance line corresponding with the 3 hour 55 EMA which are both converging with the dotted black resistance line to form strong resistance. This should occur within the next 24 hours or so around 8050. From here we should see a drop to the support of the down trend channel as well as the red longer term uptrend line at around 6980. Here we will find very strong support AND close our CME gap.
Next we will need to clear our red CME gap and an upwards breakout of the black downtrend channel takes us as high as 8800 which is right at the top thus clearing our gap. From here it will be down down down. Still long term bear, so again have flagged this is short even though I am expecting one last test of the top (at least as far as 8550).
Comment:
Fractal emerging. Looks like we will head up before down if the fractal plays out:
