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?
Here’s this week’s chart.
Click on chart to enlarge view.
In this week’s Mystery Chart we should get a good gauge for how many of you out there are ready to dip your toes in and start buying some beaten-down assets following the carnage from the recent market volatility.
We’ve witnessed some of the most extreme selloffs in history in Bonds, Stocks, and Commodities over the last few weeks. With the latter two down nearly 30% from their recent highs, who’s looking to do some bottom-fishing?
Since breaking its most recent pivot low, price has absolutely collapsed back to the bottom of its range and is now testing support at former all-time lows. This would make for an excellent level to define risk for longs… if it holds.
So will price find its footing at this logical level of interest and reverse higher or do we simply digest the recent selloff and then roll over to fresh lows in line with the underlying downtrend?
I want to hear your thoughts.
Tweet me @Sstrazza or email me at email@example.com and check back on Thursday to find out why this chart is relevant.