Price is forming a rising wedge formation, & last week made a break of key level support structure. A retest of the pink highlighted zone as new resistance is where a powerful move can occur to push price to the downside & start a new downtrend..
Couple things to note:
1. When the yield curve hits the bottom trend line, stocks have performed poorly in the following years.
2. When the yield curve is low and near the bottom trend line, the moving average crossover has been a good signal of an impending stock market peak within 5-8 months.
So besides the deteriorating economic data (use PMI not CPI- CPI is what has already happened akin to looking at the rear view mirror in a car. PMI is looking at what IS coming akin to looking through the windshield in a car), what is another signal that a recession is coming? The yield curve and how people would rather hold money in the short term rather than the...
FED with no other choice but to cut rates as predicted a few weeks ago. This was no coincidence and perfectly plays into the recession scenario.
Cutting rates with the fully loaded balance sheet is a very precarious task and markets are bound to become increasingly unstable Because of the insanely high uncertainty when it comes to monetary policy.
Hi all, this is not a trade to take at the time UNTIL WE SEE a breakout of the trend line AND A RETEST! Of course, price can continue bunny hopping up and respecting the trend line so take this trade under the two requirements mentioned! Break and retest!
Two Possible outcomes, the most important aspect with this trade waiting for the pullback, It's the only validation between staring a downtrend or continuing the uptrend. Patience Is The Key!
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From the books: "RSI - the complete guide by John Hayden" and "RSI. Logic Signals & Time Frame Correlation" by Walter Baeyens
Price/RSI divergence provides another source of confusion. Many mainstream publications about the RSI tell you that this kind of divergence signals the end of the current trend. Some even list divergence as buy and sell signals!...