The last major two lows generated a possible channel bottom. In Sept 23, shorts broke a major level and rushed for the break of that line for a 3rd time. Really scary. They almost got it, but then the rally happened. Now we are out of balance to the high side, and have hope we can go higher, but not before we take a soft landing, IMO.
Based on the channels created by price action AND horizontal fibs based on the high and low of covid 2020 to 2023, we have 4808.25 as a support level. Two key lines merge in early MAY 24.
A fib line (61.8%) of the previous range on the channel, and the line defined by the previous all time high.
We have now explored above, which is bullish, but will it sustain? We are currently 1/3 the way through a possible short term H/S event. If we crash tonight into tomorrow, market is done. I mean major correction. However, if we have enough momentum to define this H/S, we should only drop roughly equal to the height of that existing pattern. Thus, we will have, for now, preserved the current prices.
Then, we can start bouncing between the pink trend lines, which were the real battle over this last couple weeks, but those are just entries and exits. The real battle should be won by end of H/S. Because we can then accumulate volume in this space below the high, but above 4808, before a very slow retest of key fibs as they combine May 2-5th or so.
One more alternative exits. If we are almost done with the head and shoulders, and we get a last second break out, market would likely go into a bubble. But honestly? We're getting exhausted up here. Price action is sluggish. I'm just not seeing any interest in my charts to suggest the bubble option is valid anymore. And it's really a nice stable retracement to that old high of 4808. Just a few more months of sideways, _possibly a rate drop_, and the market can continue more steady, versus a hyperbolic crash or bubble.
I'm probably more of a fan of the middle road. Flag out here, build some interest, then see where we are at. That's "healthy" to me. I think we all keep expecting more severe drama due to the recent memory of black swan events like COVID and FED influence, and this last rally.
Plus, the draw back is probably Mag 7 only, we might even see small caps start to kick in while the correction is happening. But ya know, real traders don't use fibs because real traders scalp the 5 min chart because there is not predictability to the markets. :)
Based on the channels created by price action AND horizontal fibs based on the high and low of covid 2020 to 2023, we have 4808.25 as a support level. Two key lines merge in early MAY 24.
A fib line (61.8%) of the previous range on the channel, and the line defined by the previous all time high.
We have now explored above, which is bullish, but will it sustain? We are currently 1/3 the way through a possible short term H/S event. If we crash tonight into tomorrow, market is done. I mean major correction. However, if we have enough momentum to define this H/S, we should only drop roughly equal to the height of that existing pattern. Thus, we will have, for now, preserved the current prices.
Then, we can start bouncing between the pink trend lines, which were the real battle over this last couple weeks, but those are just entries and exits. The real battle should be won by end of H/S. Because we can then accumulate volume in this space below the high, but above 4808, before a very slow retest of key fibs as they combine May 2-5th or so.
One more alternative exits. If we are almost done with the head and shoulders, and we get a last second break out, market would likely go into a bubble. But honestly? We're getting exhausted up here. Price action is sluggish. I'm just not seeing any interest in my charts to suggest the bubble option is valid anymore. And it's really a nice stable retracement to that old high of 4808. Just a few more months of sideways, _possibly a rate drop_, and the market can continue more steady, versus a hyperbolic crash or bubble.
I'm probably more of a fan of the middle road. Flag out here, build some interest, then see where we are at. That's "healthy" to me. I think we all keep expecting more severe drama due to the recent memory of black swan events like COVID and FED influence, and this last rally.
Plus, the draw back is probably Mag 7 only, we might even see small caps start to kick in while the correction is happening. But ya know, real traders don't use fibs because real traders scalp the 5 min chart because there is not predictability to the markets. :)
Comment:
It's also nice that 5k is about the centerline of the forming order block over the next couple months as well.