Okay. I actually think it has some definite merits, however you have to remember that it’s not a bug, but a feature and the last thing I want to do is allow my own biases to guide my calls or analysis of the market. So with that disclaimer in mind, I wanted to show the data behind the chart that I’ve posted in the last few days. It shows market’s price action from the first day of August to now, and what the momentum of price is based on.
The chart depicts the price action in August as a curve. And what you notice is that in the middle of August, price, which was falling as of July, bounced off the bottom of the curve and then entered another upward trend. However, at the same time, price was also closing in on the upper end of the current trading range, so we also had price in a sideways pattern. But as you can see, once August ended, price broke out of this range and then took off in a horizontal fashion. In other words, the market turned positive.
Then, of course, in the next two months, we had a few hiccups which at times gave us the opportunity to see a wide range of price action, but once those were resolved, price continued to follow the bullish trend, and hasn’t looked back since. In fact, as of this week, the upward trend has become even stronger.
The chart below shows the current moment in time, and what you will notice is that the chart has seen several variations of a bearish pattern since the market bottomed in July, but what we are currently seeing is not that, but rather a short-term neutral trading range, with price continuing to circle around a ceiling.
So what can we conclude from all this?
Well, we can say that the market has probably found a “broken deadline” to the downside, which as you know, is at least two months away from expiration. We can also say that the market is very close to a key area of support which will give price a bit of a boost to confirm the break of the resistance.
There is still a risk of a sharp downward move.