Bear market rally time? Sell it
I suspect a short term but potentially strong bear market rally up to resistance levels and volume profile nodes (yellow areas, with points of control being the broken yellow lines).
Short term momentum indicators are oversold, but most importantly we seem to have found support on a major support line, which has acted as support throughout this bear market.
Break of this support at price c$3,700 could spell capitulation. Although, a fake break-down below is likely, and could be what we saw overnight in the futures market.
The macro economic outlook is grim and supports a 08 style scenario, however, markets do not go straight down or straight up. We have seen 5 red days in a row, with yesterday, even with a 75point rate hike, ending the red streak.
The tape seems to have reversed overnight, however, keeping max pain in mind, this looks like a stop-hunt, and a false breakdown below major support, to grab liquidity before continuing higher for warranted relief rally up to resistance.
This market has followed support and resistance trend lines surprisingly closely, so watching for price action around major supports and resistance, as well as Volume Profile POCs, is key to spot reversals.
My relief rally price targets start at $3,900 - $4,000, where I expect rejection at the channel resistance. Or, if this is broken, $4,200 - $4,300 are the next levels to watch. Finally, if we break above $4,300,the major trend resistance line will be the final stop at about $4,400.
To the downside, I suspect the channel resistance to hold but that we will continue to trend lower, with the channel supporting us all the way down to $3,300.
Capitulation for me would mean breaking below the down trend channel, and waterfalling to price levels we thought we would never see again.
*** Not financial advice just an idea***
Short term momentum indicators are oversold, but most importantly we seem to have found support on a major support line, which has acted as support throughout this bear market.
Break of this support at price c$3,700 could spell capitulation. Although, a fake break-down below is likely, and could be what we saw overnight in the futures market.
The macro economic outlook is grim and supports a 08 style scenario, however, markets do not go straight down or straight up. We have seen 5 red days in a row, with yesterday, even with a 75point rate hike, ending the red streak.
The tape seems to have reversed overnight, however, keeping max pain in mind, this looks like a stop-hunt, and a false breakdown below major support, to grab liquidity before continuing higher for warranted relief rally up to resistance.
This market has followed support and resistance trend lines surprisingly closely, so watching for price action around major supports and resistance, as well as Volume Profile POCs, is key to spot reversals.
My relief rally price targets start at $3,900 - $4,000, where I expect rejection at the channel resistance. Or, if this is broken, $4,200 - $4,300 are the next levels to watch. Finally, if we break above $4,300,the major trend resistance line will be the final stop at about $4,400.
To the downside, I suspect the channel resistance to hold but that we will continue to trend lower, with the channel supporting us all the way down to $3,300.
Capitulation for me would mean breaking below the down trend channel, and waterfalling to price levels we thought we would never see again.
*** Not financial advice just an idea***
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