From the desk of Steve Strazza @sstrazza
Another fresh Mystery Chart!
What we do here is take a chart that’s captured our attention and remove the x/y-axes as well as any other other labels that’d help identify it. This chart can be any security of any asset of any timeframe – on absolute or relative basis.
Maybe it’s a ratio, a custom index, or maybe price is inverted. It could be all three!
The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize it objectively.
While you can try to guess the chart, the point is to make a decision…
So let us know what it is… Buy, Sell, or Do Nothing?
Here’s this week’s chart!
Let’s try to break it down.
Sellers were in heavy control on the left-hand side of the chart, so we know we have a structural downtrend as our backdrop.
After buyers attempted to show up, they couldn’t reverse this trend. Just recently, price broke to new all-time lows.
So, the question is simple…
Does this textbook consolidation just resolve lower within the context of its underlying downtrend?
Or, do buyers step in at this logical level of support and defend the prior lows?
Regardless of where we go from here, our risk is very well-defined for a shot on either side. Not to mention, new record lows are usually a significant development…
For these reasons, don’t forget to check back later in the week to find out why this chart is relevant.
In the meantime, we want to know what you think about it!