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 the chart to enlarge view.
It’s another long-term downtrend, something we’re seeing a lot of lately as global markets continue to tumble.
One thing to note is when prices blow through an important level, especially on their first test as they did here, while definitely not a negative, it is always prudent to expect some backing and filling. We also must consider the fact that prices are extended from the mean and momentum is in an extreme oversold condition (not shown on the chart).
For these reasons, we would be patient in the near-term but sellers over the intermediate to long-term, looking to fade strength back towards prior record lows.
Tell us what you’d be doing here.
Tweet me @Sstrazza or email me at firstname.lastname@example.org and check back on Thursday to find out why this chart is relevant.