As suspected, last weeks bounce was subsequently a failure and we continue down today. After dropping some FIBs on the daily, I noticed something strange. I rarely use patterns and tend not to take them as seriously as trading fundamentals like support/resistance, trend lines, double tops/bottoms; however, I see this as a possibility. With today's wick down and break of 24000, I am waiting to see if we get a bounce and rejection between 24700-25700 range and continue down or if we complete this CYPHER pattern with a retracement all the way up to 28300 before continuation downward. I am still BEARISH and will remain so until we break above the previous high or we get consecutive convincing higher highs and higher lows.
@PapaOfFour, no disrespect but I don't look at anything lower than the hourly when I'm trying to determine overall market probabilities. That goes for FOREX, Crypto, Stocks, etc. You CANNOT determine an overall market reversal on a 5min chart. There is way too much noise on that low of a time frame.
PapaOfFour
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@kyeats813, yeah, I hear you. When I am looking at the 5 min, I am looking at a very very short term reversal. This one happens to coincide with the lower limit of the rising channel which has been in place since 2010. It bounced within 50pts of this line, on horizontal support. In the very short term, the decade long up trend was broken, consistent with a potential bearish channel which has formed since the high last month.
Now that I have observed this short term, will be looking for confirmation on the 15, & 30. Even with that confirmation still looking for a run up to either 26000 ish, or the 28 range you mentioned.
On the 1hr, a top near 26000, would likely be followed by a break of the decade long bull run shortly after. Next real support isn’t until 22000.
kyeats813
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@PapaOfFour, awesome to see planning and strategy you have. I'm a firm believe in having plans for future trades. If this happens, I'll do this... I keeps you discipline and more profitable than being a reactionary trader.
PapaOfFour
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@kyeats813, thanks. It was an interesting little period, as I say on the 5min there was a clear break, on the 15 and 30, the close was on the line. Subsequently we had a small break on the 15 and bounced on horizontal support. This tells me the market is still uncertain about its own direction. Similarly the sell off into the close, stopped right on top of that decade long trend line. I guess nobody wanted to hold overnight in case of another gap down in the morning. My gut feeling, and it is only a feeling, is that we gap up in the AM, but that still doesn’t mean we are in the same bull market, or that it’s over yet. We will know more by Wed/Thurs
PapaOfFour
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@kyeats813, Here is a look at the mini break on the 45min time frame. Potential bearish channel in orange. Long term bull dark green, horizontal support neon green. To me, confirmation of a shift, would be hourly breaking through horizontal support to bounce off orange, and a daily doing the same.