The "normal" physical behavior of a rubber band is, to snatch back to the center.
This is exactly what i expect here. As we know, price is reaching the centerline over 80% of time - OK, done.
Now, the same apply for the "other" lines, the U-MLH, but also the L-MLH.
My view is as follow:
1. IF we close below the centerline AND the A/R line, then we will see price going further south, down to the L-MLH
2. IF price is shooting once more to the north, then the first target will be the L-MLH of the white fork. And if panic sets in during the bounce up, the short-squeeze will become true and we will see new highs.
Because the market is a living animal, we never now in advance what it will do.
All we can profit of is, to take our statistical chances and play it accordingly.
In this situation, my play would be to the upside, with stops below the last bars low, around 2090 and my target would be at least the upper, down sloping A/R line, or even higher, the L-MLH of the white fork.
Play it small, play it save!
You now either can close and run away with your profit, or you try to take it one step further, above the A/R line and up to the upper U-MLH of the blue fork.
How ever - going B/E ist a must at this stage of the trade.
How to find high probability trades and trade my method.