Good morning, traders. Overnight, we saw price dip into the blue demand zone that I mentioned we were watching about a week ago. We are also continuing to watch the H4 hidden bullish divergence (red arrows) complete and confirm. H4 is currently printing a TD 9 buy signal with RSI in oversold and Stoch RSI bottomed out. This does not mean that price will bounce right now, but traders should be paying more attention now for such a bounce and possible reversal. Importantly we can note that the supply volume continues to drop off as price has dropped with special interest given to the previous candle which printed a hammer reversal setup with a very small candle spread. In terms of volume and price action, that means we saw supply still coming comparatively strong with that seen two candles prior but getting much less result. As such, we can understand that demand has shown up quite strongly at that area. However, we need to see price follow through with expanding volume and increasing candle spread as price rises to confirm that a reversal is occurring.
The intersecting pitchforks paint an interesting picture. Price spent much time on the top half of the descending pitchfork, only recently falling to the lower half. The current H4 candle has been initially rejected at that pitchfork's median. If price can reclaim the topside of that descending median line, then traders can be more bullish. Failure to do so should have traders watching the downside. If you are bullish, then you want the $10000-$10200 range to ultimately hold. The top of the range is the S2 pivot and failure of that range to hold should have traders looking at the likely trip down into the $8000s.
While CT and TV are abuzz with "the sky is falling" narratives again, zooming out to the daily we can see that there just hasn't been a whole lot of interest in selling during this latest drop. How do we know? Because volume continues to contract as price has fallen. Daily pivot is support price at this time but the 21 EMA looms just overhead. A strong daily close above that 21 EMA would be bullish. We can also see that daily Stoch RSI is just now tapping oversold while RSI is slightly bearish at 46. I have seen a lot of erroneous EW discussion out there mentioning that because what may be wave 4 has dipped into wave 1, the count is invalidated. That is not necessarily the case as EW recognizes leading and ending diagonals as having overlapping waves 1 and 4. We can see the dashed resistance and support lines printing a possible ascending wedge (leading diagonal) so while traders should be cautious as it may not ultimately play out as a diagonal, the reality is that the wave count isn't necessarily invalidated. Of course, we have to keep in mind that this could be the beginning of the final leg down and the previous 3 waves up were the X wave of a WXY correction. This is something I mentioned over a month ago that traders should keep in mind as a possibility.
As an aside, the H6 TF is printing a TD 8 at this time with another 3h15m left in the candle. RSI on the TF is also oversold and, like the H4, Stoch RSI is bottomed out. So it is possible that price could visit the S2 pivot at $10200 before reversing, even if only via a wick. The H1 Stoch RSI is overbought and as always, I'm watching for RSI to close above descending resistance.
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Be sure to hit the "thumbs up!"
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.
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. When you do, be sure to explore the other TFs to see what I'm watching on those TFs.
The intersecting pitchforks paint an interesting picture. Price spent much time on the top half of the descending pitchfork, only recently falling to the lower half. The current H4 candle has been initially rejected at that pitchfork's median. If price can reclaim the topside of that descending median line, then traders can be more bullish. Failure to do so should have traders watching the downside. If you are bullish, then you want the $10000-$10200 range to ultimately hold. The top of the range is the S2 pivot and failure of that range to hold should have traders looking at the likely trip down into the $8000s.
While CT and TV are abuzz with "the sky is falling" narratives again, zooming out to the daily we can see that there just hasn't been a whole lot of interest in selling during this latest drop. How do we know? Because volume continues to contract as price has fallen. Daily pivot is support price at this time but the 21 EMA looms just overhead. A strong daily close above that 21 EMA would be bullish. We can also see that daily Stoch RSI is just now tapping oversold while RSI is slightly bearish at 46. I have seen a lot of erroneous EW discussion out there mentioning that because what may be wave 4 has dipped into wave 1, the count is invalidated. That is not necessarily the case as EW recognizes leading and ending diagonals as having overlapping waves 1 and 4. We can see the dashed resistance and support lines printing a possible ascending wedge (leading diagonal) so while traders should be cautious as it may not ultimately play out as a diagonal, the reality is that the wave count isn't necessarily invalidated. Of course, we have to keep in mind that this could be the beginning of the final leg down and the previous 3 waves up were the X wave of a WXY correction. This is something I mentioned over a month ago that traders should keep in mind as a possibility.
As an aside, the H6 TF is printing a TD 8 at this time with another 3h15m left in the candle. RSI on the TF is also oversold and, like the H4, Stoch RSI is bottomed out. So it is possible that price could visit the S2 pivot at $10200 before reversing, even if only via a wick. The H1 Stoch RSI is overbought and as always, I'm watching for RSI to close above descending resistance.
_____________________________________________________________
Be sure to hit the "thumbs up!"
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.
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. When you do, be sure to explore the other TFs to see what I'm watching on those TFs.