Taking a look first at the 4hr, we seem to be trapped in this regression channel between 10.9k and 9.3k for a little while now. Seeing the last Elliot Wave was at the top of this channel, there is a good chance we will be hitting the bottom of this channel next. We are currently chopping around the 0.618 fib inside the trend with 10.4k acting as a pretty decent resistance price zone.
What I wanted to concentrate on a little bit to see the wider picture is on the weekly TF. The previous weekly candle printed a bearish spinning top, but that can also be a neutral signal and just a continuation of current price action which is pretty locked into the regression channel.
This is what I found very interesting on the weekly chart. Many people think that we are possibly still in a parabolic run up. According to any historically significant data, any time we have ever been UNDER the 11 day MA on the weekly, we have ALWAYS checked the 21 EMA before any continuation up again. What this means is that even if we are still in a parabolic run, we are still extremely likely to hit the 21 EMA that's currently right around 9.4k and 9.3k and signifies the bottom trend line of the local flag we are in.
The 11 day MA is currently acting as resistance, and without a significant breakout and close above it, the closest moving average below it does happen to be the 21 EMA I referenced above. While I can foresee the possibility of testing the upper trend line in the regression channel, it is a burden on the bulls to push through it and keep price there long enough for the weekly to close above it, which is highly unlikely. What's more likely is a retest of the 9.4k trend line below before we can think about entering a long in this pattern.
If you're thinking about a long, wait out the 9.4k. We should get a pretty nice bounce back up from there. And that will likely be the ultimately test is how price acts afterwards. Most of the time we have broken that 21 EMA, it signified a much larger correction ahead.
And frankly my money is on the fact that most parabolic runs never spent a very long time hobbling around the 11 MA.
What I wanted to concentrate on a little bit to see the wider picture is on the weekly TF. The previous weekly candle printed a bearish spinning top, but that can also be a neutral signal and just a continuation of current price action which is pretty locked into the regression channel.
This is what I found very interesting on the weekly chart. Many people think that we are possibly still in a parabolic run up. According to any historically significant data, any time we have ever been UNDER the 11 day MA on the weekly, we have ALWAYS checked the 21 EMA before any continuation up again. What this means is that even if we are still in a parabolic run, we are still extremely likely to hit the 21 EMA that's currently right around 9.4k and 9.3k and signifies the bottom trend line of the local flag we are in.
The 11 day MA is currently acting as resistance, and without a significant breakout and close above it, the closest moving average below it does happen to be the 21 EMA I referenced above. While I can foresee the possibility of testing the upper trend line in the regression channel, it is a burden on the bulls to push through it and keep price there long enough for the weekly to close above it, which is highly unlikely. What's more likely is a retest of the 9.4k trend line below before we can think about entering a long in this pattern.
If you're thinking about a long, wait out the 9.4k. We should get a pretty nice bounce back up from there. And that will likely be the ultimately test is how price acts afterwards. Most of the time we have broken that 21 EMA, it signified a much larger correction ahead.
And frankly my money is on the fact that most parabolic runs never spent a very long time hobbling around the 11 MA.
You can still short here.
A good take profit from a short here is still right around the 21 EMA on the weekly. I like to be conservative and make sure to hit target so we don’t get stuck in a short in case the 21 EMA price doesn’t get hit exactly. I’ve got my TP set at $9600.
We will likely still chop around for a while though, so don’t be alarmed if price does go up. But I DO expect a strong wick down to 9600. It will likely go fast and likely bounce back up fast, so you need to have your short TP locked and your long order ready to trigger from there.