I am not liking this price action one bit, as it is starting to play out one of the reversal scenarios I laid out in my previous thread. I'd encourage you to read through this before reading this post:
For clarity in this post see this screenshot which I reference:
So...what you are seeing in this idea is the price moving out of the ascending channel. These are some of the steps leading to a bearish scenario, which is confluent with what we've seen three times previously:
1) Price moves out of the ascending channel - confirmed
2) It begins to form a bull flag - confirmed
3) This pushes the price higher
4) However this ultimately fails when it paints a bearish divergence
This is where we are. So I would be very, very careful here. I still think we are going to paint a high, either a higher higher or a lower high in either a bearish or bullish scenario.
These are the 3 most likely scenarios I see playing out:
1) The bull flag simply carries us higher and we breach 86xx and carry on making higher highs. Happy days.
2) The PA paints a higher high, alongside a lower high on the RSI indicating a divergence, before it breaks down.
3) The PA paints a lower high, alongside a higher high on the RSI indicating a divergence, before it breaks down.
There are other scenarios of course, we could move into another channel, but I would encourage you to read the Reversal Scenarios post as to why I don't believe that is likely based on the nature of these up moves.
For clarity in this post see this screenshot which I reference:
So...what you are seeing in this idea is the price moving out of the ascending channel. These are some of the steps leading to a bearish scenario, which is confluent with what we've seen three times previously:
1) Price moves out of the ascending channel - confirmed
2) It begins to form a bull flag - confirmed
3) This pushes the price higher
4) However this ultimately fails when it paints a bearish divergence
This is where we are. So I would be very, very careful here. I still think we are going to paint a high, either a higher higher or a lower high in either a bearish or bullish scenario.
These are the 3 most likely scenarios I see playing out:
1) The bull flag simply carries us higher and we breach 86xx and carry on making higher highs. Happy days.
2) The PA paints a higher high, alongside a lower high on the RSI indicating a divergence, before it breaks down.
3) The PA paints a lower high, alongside a higher high on the RSI indicating a divergence, before it breaks down.
There are other scenarios of course, we could move into another channel, but I would encourage you to read the Reversal Scenarios post as to why I don't believe that is likely based on the nature of these up moves.
Comment:
We did.
More details later.