What market wants you to believe vs What will actually happen
So the market wants you to short. We see an ascending broadening wedge pattern (highlighted with light blue background) as well as another ascending triangle (highlighted in dark blue border) pattern forming. As we are at the resistance line of both these potential patterns, it tells us to short. However... I have seen this pattern multiple times before and looking back on how it played out in the past, I can potentially determine how it will play out this time.
In the past, rather than bounce off resistance and head back down as the patterns are suggesting will occur, we actually launched out of the pattern before retracing back through it as highlighted by the green line. This triggers a short squeeze scenario (and given the level of shorts - a very likely one). Once we hit the support of the patterns again, longs increased - however instead of finding support we actually eventually fell through resulting in a 'double bottom'. This is where longs will skyrocket as many will think this is confirmation of the bottom. The price will increase again however and FOMO will occur. What will actually happen though, is that we find resistance again when we hit our patterns (in blue); hover around a bit before heading down (again squeezing longs) then sideways for a while. Longs will once again increase further before we drop like a stone to our actual bottom around 1800ish.
Will wait and see if this plays out, it might not - but something I am keeping my eye on.
In the past, rather than bounce off resistance and head back down as the patterns are suggesting will occur, we actually launched out of the pattern before retracing back through it as highlighted by the green line. This triggers a short squeeze scenario (and given the level of shorts - a very likely one). Once we hit the support of the patterns again, longs increased - however instead of finding support we actually eventually fell through resulting in a 'double bottom'. This is where longs will skyrocket as many will think this is confirmation of the bottom. The price will increase again however and FOMO will occur. What will actually happen though, is that we find resistance again when we hit our patterns (in blue); hover around a bit before heading down (again squeezing longs) then sideways for a while. Longs will once again increase further before we drop like a stone to our actual bottom around 1800ish.
Will wait and see if this plays out, it might not - but something I am keeping my eye on.
Comment:
Fractal is playing out. We are just about at the top (around 7125 max) before we descend back to 34xx. Here is a rough estimate of how the fractal determines the rest of the year. I have now closed my longs (executed at 6890) am laddering in shorts from 6800 in $50 intervals until 7300. Will short all the way back down to 34xx before going long again.
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Gone a bit higher and now hit my original top as per this main analysis. NVT has hit massive sell zone. Don't fomo. This is a huge short back down to 3400 level opportunity. This is currently a short squeeze and as everyone is switching to longs, the move back down will result in a long squeeze. It will be choppy for the next week (as indicated by the green lines) before we head back down in about 7 days.
Comment:
Have recalculated the top based on the fractal and have made an assumption it will be at about 7850ish. There will be a final push in the next two days to reach this top. Once reached we will head down as roughly outlined by the green lines. The second attempt will not break the high of the first attempt (around 7850ish). Once this occurs should short back to 34xx.
