Mystery Chart (06-16-2020)

JC Parets
June 16, 2020

From the desk of Steve Strazza @Sstrazza

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?

This week we have a long-term topping pattern that just shook beneath a key level of support before quickly reclaiming it.

Click on chart to enlarge view.

This week's chart is a fun one as there are a handful of both bullish and bearish characteristics to support a valid argument on either side.

Some of our favorite Technical Analysis aphorisms like "the bigger the top, the bigger the drop," and "the more times a level is tested, the more likely it is to break" would suggest we should err on the bearish side.

As would momentum, which just hit its lowest reading on record, confirming the breakdown to fresh lows... at least for the time being.

Although, it's not all bad news as price just registered a failed breakdown and confirmed its bullish momentum divergence by breaking back above support. And you know what they say about this kind of chart pattern... "From failed moves come fast moves in the opposite direction."

So, which saying will prove true this time?

We want to know if you're buying this failed move, betting against it, or sitting on your hands for now.

Let us know what you think!

Tweet me your thoughts @Sstrazza or email me at Strazza@Allstarcharts.com and check back on Thursday to find out why this chart is relevant.

In the meantime, check out this FREE preview of our new Charting School course to learn more about some of the concepts discussed in this post.

Allstarcharts Team

Filed Under