Good morning, traders. Welcome to December. Will we see a Santa Claus rally later this month, similar to what traders are expecting for stocks? The monthly close showed signs of life just prior to it but the weekly didn't end up as bullish as I had hoped we might see. However, the weekly did set up a potential reversal due to the doji it printed. The candle is actually a pause and requires a good green candle this week to confirm it as a reversal. Failure of this week's candle to follow through in such a manner likely sets up some sideways movement at best for now, if not a further drop.
Price has been hovering around the descending resistance line (dashed blue) that dates back to the fall from the $6000s, but is on the topside of it at this point. In doing so, price has printed a large blue descending broadening wedge. A close above the wedge's resistance in the next 24 hours should have price still targeting the $4760-$4770 area based on the patterns' targets, but I will be looking for it to reach the equilibrium of the lower gray zone at around $4800. It is also printing a smaller green descending broadening wedge inside the blue wedge. A close above the McGinley Dynamic (red moving average line) should signal further price advancement for those who prefer to trade based on moving averages. The 4H RSI is printing a descending wedge and a breakout through the wedge's resistance can also be noted as a potential signal that price is headed up. OBV has continued to rise in sync with the November 25th price low.
We should also take note of the orange descending broadening wedge. Due to the price action on the large dashed blue descending broadening wedge from the fall from the $6000s,
I am not convinced that the pattern's resistance is as significant as it once was. Rather, this orange wedge resistance may be the area to watch. A close above the orange resistance sets up a target of around $5300 (basically, the equilibrium of the upper grey zone).
The 1D has three targets based on the channel, wedge, and possible pennant/symmetrical triangle noted. The channel and pennant target the $5025/35 area while the red wedge targets $5550. Traders should be mindful of the 1.272 fib level/1D pivot as it is the target based on the width of the pennant/symmetrical triangle and could result in a bit of pullback before further price appreciation. I will be looking at some shorter TF charts as well as the 1W and 1M charts during this morning's live stream. The 1M may be printing a descending wedge which should have price heading higher if it plays out. The key will be to watching the descending resistance line for a close above it. This month would require a close above $6000 or next month would require a close above $5400. The target would be $15,800-$16,250 depending on which month it happened.
If, instead, price drops further, then on the 4H chart I will be watching for the ascending blue dashed line and $3700 to provide support. Failure of that area to do so will have me looking at that November 25 swing low at $3474.73. On the 1D chart, I will be looking at the $2975 area as that would be the target based on the size of the flagpole leading up to the possible pennant/symmetrical triangle that's currently printing. However, along the way the previous low at $3474.73 has to be watched as it is also the target of the symmetrical triangle based on its width, so we could see a bounce as a double bottom is formed.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
Price has been hovering around the descending resistance line (dashed blue) that dates back to the fall from the $6000s, but is on the topside of it at this point. In doing so, price has printed a large blue descending broadening wedge. A close above the wedge's resistance in the next 24 hours should have price still targeting the $4760-$4770 area based on the patterns' targets, but I will be looking for it to reach the equilibrium of the lower gray zone at around $4800. It is also printing a smaller green descending broadening wedge inside the blue wedge. A close above the McGinley Dynamic (red moving average line) should signal further price advancement for those who prefer to trade based on moving averages. The 4H RSI is printing a descending wedge and a breakout through the wedge's resistance can also be noted as a potential signal that price is headed up. OBV has continued to rise in sync with the November 25th price low.
We should also take note of the orange descending broadening wedge. Due to the price action on the large dashed blue descending broadening wedge from the fall from the $6000s,
I am not convinced that the pattern's resistance is as significant as it once was. Rather, this orange wedge resistance may be the area to watch. A close above the orange resistance sets up a target of around $5300 (basically, the equilibrium of the upper grey zone).
The 1D has three targets based on the channel, wedge, and possible pennant/symmetrical triangle noted. The channel and pennant target the $5025/35 area while the red wedge targets $5550. Traders should be mindful of the 1.272 fib level/1D pivot as it is the target based on the width of the pennant/symmetrical triangle and could result in a bit of pullback before further price appreciation. I will be looking at some shorter TF charts as well as the 1W and 1M charts during this morning's live stream. The 1M may be printing a descending wedge which should have price heading higher if it plays out. The key will be to watching the descending resistance line for a close above it. This month would require a close above $6000 or next month would require a close above $5400. The target would be $15,800-$16,250 depending on which month it happened.
If, instead, price drops further, then on the 4H chart I will be watching for the ascending blue dashed line and $3700 to provide support. Failure of that area to do so will have me looking at that November 25 swing low at $3474.73. On the 1D chart, I will be looking at the $2975 area as that would be the target based on the size of the flagpole leading up to the possible pennant/symmetrical triangle that's currently printing. However, along the way the previous low at $3474.73 has to be watched as it is also the target of the symmetrical triangle based on its width, so we could see a bounce as a double bottom is formed.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
Comment:
As I have mentioned often in the past, even if you're watching a pennant you should be prepared for a possible flag to develop instead.
