Start focus on consolidation,weekly supp/res and 4H price action
Not yet bullish, but as I wrote on Twitter yesterday, Bears started to lose some of their power. Market started some bearish consolidation. These periods sometimes provide early buying opportunites in smaller sizes, but we have to be precise on timing, and also very strickt on money management! Now we'll see a dip first. But at the end of the post you'll see this dip may be bought in small. Strategic trendfollower traders however have to wait longer to load a big bullish position.
Weekly (NEUTRAL):
- Ichimoku is neutral as Price is in the Kumo cloud. In fact it has been neutral for about 11 weeks, with bearish bias for 8 weeks now. Price reached important weekly key supp/res zone around Kijun Sen. 38,05 - 39,85 should hold in coming weeks, or else we can forget all bullish hopes. However if the support zone holds, and we see some consolidation here, that can be followed by a buy signal later.
- Heikin-Ashi signal this week still shows bearish price action on average, with strong momentum. -> large candle body, relatively short lower wick, haDelta further down. Before we start buying in large, we have to see at least early consolidation signals, and maybe a reversal pattern later.
- MACD -> is it bearish? Nope, it just signals pull back, so that market has lost short term bullish chances few weeks ago. No strong bearish signal until the value of MACD is above zero. From now we have to watch MACD histogram. If that starts ticking higher, will be an early signal for a possible bullish MACD cross later above zero value.
- EWO is down to neutral, stays absolutely ard zero.
I still maintain the idea (first showed you few months ago) that market possibly building an Inverse Head and Shoulders pattern. If that gets validatiom in coming weeks/months, the breakout target will be 60-65! (which is also a Monthly bearish support). Obviously we do not yet buy based only on this beliefe! Price action has to confirm! That is very important to understand, that the entry price of a trade matters a lot less, than the odds of the setup, and the money management strategy of the trader!
Daily (BEARISH, consolidation in progress):
- Ichimoku is bearish. Can not talk about a bullish reversal until Kijun Sen is so far above price. First Kijun has to come lower, than averages have to flatten out, then market has to confirm a higher low, and only after these we can hope for a high probablity buy signal which should be taken in better size.
- Heikin-Ashi: haDelta and candle signalled yesterday start of some short term bearish consolidation. Candle turned green today, but this is NOT yet a buy signal! Maybe a warning for bears to take profit and reduce some shorts.
Looking at the whole Ichimoku picture, short term I can not immagine a lot higher pull back than 43 - 43,50
- EWO is still bearish, and will stay bearish for a while. Looking at EWO probably wave 3 was in. We have to wait until EWO shows a positive divergence.
4H (consolidation):
- The picture improved a bit, as Ichimoku setup turn more neutral: Chikou hit past candles as Price spiked above Kijun Sen. Kumo shades price ahead as longer term averages are coming lower.
- EWO back close to zero, but is turning down again.
- Heikin-Ashi is turning bearish again!
We'll see some more selling first. But the question is if we'll see a lower low or not? I bet not! I think we have to focus on next dip, which may develop more bullish divergence in EWO and end in a higher low. If from the next dip we see a Heikin-Ashi buy signal, that can be bought IN SMALL! (0,5-1 unit maximum, with tight stop)
Weekly (NEUTRAL):
- Ichimoku is neutral as Price is in the Kumo cloud. In fact it has been neutral for about 11 weeks, with bearish bias for 8 weeks now. Price reached important weekly key supp/res zone around Kijun Sen. 38,05 - 39,85 should hold in coming weeks, or else we can forget all bullish hopes. However if the support zone holds, and we see some consolidation here, that can be followed by a buy signal later.
- Heikin-Ashi signal this week still shows bearish price action on average, with strong momentum. -> large candle body, relatively short lower wick, haDelta further down. Before we start buying in large, we have to see at least early consolidation signals, and maybe a reversal pattern later.
- MACD -> is it bearish? Nope, it just signals pull back, so that market has lost short term bullish chances few weeks ago. No strong bearish signal until the value of MACD is above zero. From now we have to watch MACD histogram. If that starts ticking higher, will be an early signal for a possible bullish MACD cross later above zero value.
- EWO is down to neutral, stays absolutely ard zero.
I still maintain the idea (first showed you few months ago) that market possibly building an Inverse Head and Shoulders pattern. If that gets validatiom in coming weeks/months, the breakout target will be 60-65! (which is also a Monthly bearish support). Obviously we do not yet buy based only on this beliefe! Price action has to confirm! That is very important to understand, that the entry price of a trade matters a lot less, than the odds of the setup, and the money management strategy of the trader!
Daily (BEARISH, consolidation in progress):
- Ichimoku is bearish. Can not talk about a bullish reversal until Kijun Sen is so far above price. First Kijun has to come lower, than averages have to flatten out, then market has to confirm a higher low, and only after these we can hope for a high probablity buy signal which should be taken in better size.
- Heikin-Ashi: haDelta and candle signalled yesterday start of some short term bearish consolidation. Candle turned green today, but this is NOT yet a buy signal! Maybe a warning for bears to take profit and reduce some shorts.
Looking at the whole Ichimoku picture, short term I can not immagine a lot higher pull back than 43 - 43,50
- EWO is still bearish, and will stay bearish for a while. Looking at EWO probably wave 3 was in. We have to wait until EWO shows a positive divergence.
4H (consolidation):
- The picture improved a bit, as Ichimoku setup turn more neutral: Chikou hit past candles as Price spiked above Kijun Sen. Kumo shades price ahead as longer term averages are coming lower.
- EWO back close to zero, but is turning down again.
- Heikin-Ashi is turning bearish again!
We'll see some more selling first. But the question is if we'll see a lower low or not? I bet not! I think we have to focus on next dip, which may develop more bullish divergence in EWO and end in a higher low. If from the next dip we see a Heikin-Ashi buy signal, that can be bought IN SMALL! (0,5-1 unit maximum, with tight stop)
