There has been a 5.8 day (133 hour) cycle that began with the Russian invasion. Plotting the distance (“Dispersion” bottom left chart) between the 50hr sma (blue top left) and 200hr sma (red top left) reveals it. The turning of the peaks represents buy (green vertical lines) and sell (red vertical lines) signals. Whether or not the turning of the peaks signals selling or buying is determined by whether or not price should go up or down in order to close the distance between the 50hr and 200hr. The 50/200hr crossings represented by vertical purple lines are continuation signals. That's where we are now, after a sell signal with a setup for a 50/200hr bear cross.
One theory for why the cross stalled on Friday is that people are reluctant to short going into the weekend with the Ukraine war situation. If the cycle is to continue, price is likely to reach $100 or less by Tuesday.
A 50hr/200hr simple moving averages MACD with a 20-period signal histogram has been plotted for reference to in order to test for usefulness. Using the turning of the peaks in the lower chart appears to be the more useful source of signals.
This method does not backtest well but due to current volatility these larger moving averages have gained significance. It makes sense to explore using this technique with shorter moving averages for times of decreased volatility.
An analysis of moving average overlaps has been performed and the 50-hr and 200-hr overlap with other popular timeframe moving averages, therefore, they were considered to have added importance relative to other choices such as the 100-hr. The analysis is below. The 100-hr was initially a parameter in the “Dispersion” indicator (it accepts up to 3 moving averages) but its inclusion only added noise and weakened the resulting signal.
Here's the chart with the drawings shown: (not sure why TradingView didn't publish them)
One theory for why the cross stalled on Friday is that people are reluctant to short going into the weekend with the Ukraine war situation. If the cycle is to continue, price is likely to reach $100 or less by Tuesday.
A 50hr/200hr simple moving averages MACD with a 20-period signal histogram has been plotted for reference to in order to test for usefulness. Using the turning of the peaks in the lower chart appears to be the more useful source of signals.
This method does not backtest well but due to current volatility these larger moving averages have gained significance. It makes sense to explore using this technique with shorter moving averages for times of decreased volatility.
An analysis of moving average overlaps has been performed and the 50-hr and 200-hr overlap with other popular timeframe moving averages, therefore, they were considered to have added importance relative to other choices such as the 100-hr. The analysis is below. The 100-hr was initially a parameter in the “Dispersion” indicator (it accepts up to 3 moving averages) but its inclusion only added noise and weakened the resulting signal.
Here's the chart with the drawings shown: (not sure why TradingView didn't publish them)
Trade closed: target reached:
target reached