This chart is a bit of a mess. But, you get the idea I hope. Previous resistance levels were broken and are now acting as support levels. Support levels are stacked up on top of each other, all the way down to 205, then 160 below that. Quick blasts to 305 and 207 blew out any old short stops to those levels from the last drop, pretty much leaving resistance only at 250, 270, and 305 (If we break up through 240). Our current position looks really similar to the pre-May rise. There are also some similarities to October/November, but if you look at the support/resistance levels, Oct-Nov did not have these drawn out consolidation phases, it was more fast up fast down moves, with one major support line throughout. Here, we have many layers of support areas and consolidation zones below us.
The 0.5 Fib level from the 160-305 rise sits right underneath, and we have been ping ponging between 0.5 and 0.618 Fib levels since the drop from 270. It is my gut feeling that we will see a break of the downtrend line, followed by a drop back down to 0.5 fib, and more sideways between the 2 fib levels for another week or so, and afterwards breaking through to the upside. I am not taking any position until the 250 resistance/0.618 fib level is broken to the upside.
On the down, it's possible we don't make it through the downtrend line, which would be followed by slow dumping through support levels, picking up momentum as we go, breaking down through long stop outs. Once 205 is broken, freefall to 160 or 100 or 80. I don't really think we are ready for another huge dump yet so soon. It is a possibility and I will consider shorting if 230 is broken though, but ready to close shorts on signs of a bounce. If 205 breaks though, full on short city until at least 160...
Recommendation - wait, don't take any position until direction is clear... then ride the trend.
The 0.5 Fib level from the 160-305 rise sits right underneath, and we have been ping ponging between 0.5 and 0.618 Fib levels since the drop from 270. It is my gut feeling that we will see a break of the downtrend line, followed by a drop back down to 0.5 fib, and more sideways between the 2 fib levels for another week or so, and afterwards breaking through to the upside. I am not taking any position until the 250 resistance/0.618 fib level is broken to the upside.
On the down, it's possible we don't make it through the downtrend line, which would be followed by slow dumping through support levels, picking up momentum as we go, breaking down through long stop outs. Once 205 is broken, freefall to 160 or 100 or 80. I don't really think we are ready for another huge dump yet so soon. It is a possibility and I will consider shorting if 230 is broken though, but ready to close shorts on signs of a bounce. If 205 breaks though, full on short city until at least 160...
Recommendation - wait, don't take any position until direction is clear... then ride the trend.