What a bear trap. I think nobody was waiting for today's move after yesterday's selloff.
We are going to close above the 10 EMA - what we lost yesterday - and we broke the down trendline...
Before anyone would start to short it I have to say the rally is just starting.
While all the indicators were showing divergences: the hysteria broke down price from the descending channel clearing all the divergences. RSI on the weekly and daily charts reached multi year extremes. The COT became super bullish commercials were almost NET longs last week.
At these circumstances we had a 4 day bounce. Why was I so sure we are not testing back the lows? The reason are the previous ICLs.
If we have only a 2-3 days of weak rally without a close above the 10 EMA there is a decent chance that the previous low is back tested.
It happened in 2016 December:
It happened in 2016 July
When we had a 3 day rally and a close above the 10 EMA especially with a trendline break there is no chance for the backtest anymore.
or here:
In these cases we were printing big rallies with fat green candles day after day.
Look what happened when a short squeeze began after not such oversold levels we had in the past:
We are going to close above the 10 EMA - what we lost yesterday - and we broke the down trendline...
Before anyone would start to short it I have to say the rally is just starting.
While all the indicators were showing divergences: the hysteria broke down price from the descending channel clearing all the divergences. RSI on the weekly and daily charts reached multi year extremes. The COT became super bullish commercials were almost NET longs last week.
At these circumstances we had a 4 day bounce. Why was I so sure we are not testing back the lows? The reason are the previous ICLs.
If we have only a 2-3 days of weak rally without a close above the 10 EMA there is a decent chance that the previous low is back tested.
It happened in 2016 December:
It happened in 2016 July
When we had a 3 day rally and a close above the 10 EMA especially with a trendline break there is no chance for the backtest anymore.
Look what happened when a short squeeze began after not such oversold levels we had in the past:
Comment:
Flag seems to be ready to break out.
Comment:
Comment:
In the profit too.
