Mystery Chart 08-13-2019

JC Parets
August 13, 2019

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

To me this looks like a massive long-term range that remains intact. This is the third major test of resistance after three major tests of long-term support, so while some further churning near this level may be needed to work through overhead supply, I think we ultimately get this breakout.

On the other hand, your risk is very well-defined on the short side so I do think a bear case can be made as well. As with most conversations in markets, your perspective really depends on your timeframe, objectives,  trading approach, etc.

Click on chart to enlarge view.

For me it's simple. As long as prices are below these former highs, we cannot be long from a risk management perspective. Given the recent strength, I'd prefer to be buying a breakout rather than getting short.

What do you think?

Tweet me @BruniCharting or email bruni@allstarcharts.com and check back in Thursday to find out why this chart is relevant.

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