Mystery Chart – Buy, Sell, or Do Nothing? 6-3-16

JC Parets
June 3, 2016

It's that time again. I have a mystery chart that I think is worth paying attention to. As always with these, I took out the y-axis and all labels to eliminate any biases. Remember, the idea is not to guess what this actually is (although most of you guys can't help yourselves). The point of this exercise is to think about what you would do?

This can be a Stock, ETF, Commodity, Currency, Index, Ratio, etc. What do you want to do here? Buy, Sell or Do Nothing?

First here is a weekly chart putting in a nice bullish momentum divergence (14-period RSI) at the late 2014 lows and attempting to break out of this massive phase of accumulation over the past few years:

6-3-16 mystery chart w

The next chart represents a shorter-term time frame. Here are the daily bars breaking out to new highs this week. Notice how momentum (14-period RSI) has not hit oversold conditions in over a year, but continues to get overbought on any rallies:

6-3-16 mystery chart d

What would you do?

Click Here to see the Mystery Charts revealed

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